The East Indian Company had been in serious financial trouble by 1773. As this constituted a monopolistic trade firm in India, and also many significant individuals were stockholders, the corporation was crucial towards the British Raj. The Corporation paid £40,000 every year to retain the monopoly, however, was unable to satisfy its obligations since 1768 leading to the decrease of tea shipments to America. Trying to smuggle Dutch teas made up around 85% of any and all tea consumed in the United States.

The East India Corporation owed money to the Bank of England as well as the government, which had 15 million pounds (7 million kilograms) of tea decaying in British storage, with more in the way from India. This Tea Act 1773 complemented with Regulating Act 1773, with the primary goal of reducing a significant amount of tea kept mostly by financially distressed British East India Corporation inside its London storage and assisting the financially suffering corporation in surviving.

History

  • Well after founding in 1600, the British East India Company began dealing with eastern countries
  • The corporation acquired political influence over Bengal, Bihar, and Orissa after the War of Buxar in 1764
  • Due to the growth of frontiers and enormous expenditures in numerous battles, the firm had been in financial trouble
  • When Lord North submitted his historic bill in the senate on May 18, 1773, this was approved by British Parliament
  • The British Parliament approved the Regulation Act (1773), which was the first major step toward legislative authority over the Firm’s Indian government

Provisions of the Regulating Act, 1773 

Listed below are the provision for the regulating act 1773,

  1. The Act confined the Board of Directors to four-year terms and limited Partnership earnings to 6% until it returned a £1.5 million debt (approved by a supporting act, 13 Geo. 3 c. 64).
  2. The British government’s initial move in regulating and controlling the corporation’s proceedings  in India.
  3. It made it illegal for firm servants to engage in any personal commerce or receive donations or bribery from “natives.”
  4. The Act promoted Warren Hastings, the Administrator of Bengal, to Gov. of Bengal, and placed Madras & Mumbai within Bengal’s administration.  It provided the groundwork for India’s centralized government. With the help of a four-member executive council, the Governor of Bengal has become the Lieutenant Governor of Bengal. Decisions will be made by a simple majority, with the Governor General voting solely in the event of a tie.
  5. Calcutta’s Supreme Court is established, featuring Sir Elijah Impey as the very first Chief Judge. The court possesses civil as well as judicial power. Original and appellate jurisdiction are also available.
  6. It has given the corporation permission to preserve its Indian territorial control. It is referred to be a regulatory act since it does not give the firm entire control. In the end, we may say that this constituted the initial step towards legislative control of the corporation.

Faults in Regulating Act, 1773

Here are some of the shortcomings of the regulation act 1773, 

  • Absence of a veto authority for the Governor-General
  • It didn’t address complaints of Indian customers who’d been giving the corporation money
  • It had no effect on the corporation’s officials’ corruption
  • The Supreme Court’s authority was unclear
  • The legislative oversight of the company’s operations was ineffectual since there was a total absence of a system in place to examine the reports supplied  by the Governor-General in Cabinet

Conclusion

In India’s constitution, the Regulation Act of 1773 is very significant. For first time in India, a new constitution for business governance was adopted by this statute. This Act marked the commencement of British legislative oversight of the Company’s regime in India. As a consequence, the management of the Firm’s ruled territories wasn’t any longer a private thing for the Firm’s traders.

The main purpose of the Regulation Act was to stay abreast of the Firm’s businesses in India and Britain and to fix any deficiencies that had previously existed.