After the English East India Company received the ‘grant of diwani’ from the Mughal Emperor Shah Alam II, Robert Clive devised a system that would camouflage the virtual taking over of Bengal administration by the English East India Company.
This system came to be known as the Double Government, Dual Government or Diarchy. Under the system, the same person was appointed in the dual capacity of ‘Naib-Diwan’ (or Deputy Diwan) and ‘Naib-Nazim’ (or Deputy Nazim).
It signified the fact that the same person acted in Bengal as the ‘Naib- Diwan’ on behalf of the English; and as ‘Naib-Nazim’ on behalf of the Nawab.
This virtual unity of the two branches of the provincial administration under the control of the English is popularly, known as the Diarchy or ‘Double Government’.
The English derived much advantage out of this system of administration introduced by Robert Clive. By the time Diarchy was discontinued, much damage was done to Bengal and her people. The evil effects of the Diarchy may be summed up in the following words: Firstly, the scheme of Double Government as’ devised by Clive proved ineffective from the very beginning.
Secondly, the system brought immense suffering to the cultivators of Bengal. They were subjected to coercion by the revenue officials of the government controlled by the Company. Thirdly, the servants of the Company monopolized trade and commerce of Bengal. Also they forced the weavers to sell the cotton-goods at a price even lower than the cost of production.
Fourthly, the East India Company considered the Double Government to be a legal permit to milk the country out. Fifthly, the abuses of the Dual Government manifested itself in the worst form in the Great Famine of 1770 in Bengal.