Taking advantage of the growing weakness of the central authority, two men of exceptional ability, Murshid Quli Khan and Alivardi Khan, made Bengal virtually independent.
Even though Murshid Quli Khan was made Governor of Bengal as late as 1717, he had been its effective ruler since 1700, when he was appointed its Dewan.
He soon freed himself from central control though he regularly sent a large tribute to the emperor. He established peace by freeing Bengal of internal and external danger.
Bengal was now also relatively free of major uprisings by zamindars. The only three major uprisings during his rule were first by Sitaram Ray, Udai Narayan and Ghulam Muhammad, and then by Shujat Khan, and finally by Najat Khan.
After defeating them, Murshid Quli Khan gave their zamindaris to his favourite, Ramjivan. Murshid Quli Khan died in 1727, and his son-in-law Shuja-ud-din ruled Bengal till 1739. In that year, Alivardi Khan deposed and killed Shuja-ud-din’s son, Sarfaraz Khan, and made himself the Nawab.
These three Nawabs gave Bengal a long period of peace and orderly administration and promoted its trade and industry. Murshid Quli Khan effected economies in the administration and reorganised the finances of Bengal by transferring large parts of jagir lands into halisah lands by carrying out a fresh revenue settlement, and by introducing the system of revenue-farming.
He recruited revenue farmers and officials from local zamindars and merchant-bankers. He also granted agricultural loans (taccavi) to the poor cultivators to relieve their distress as well as to enable them to pay land revenue in time. He was thus able to increase the resources of the Bengal government.
But the system of revenue-farming led to increased economic pressure on the zamindars and peasants. Moreover, even though he demanded only the standard revenue and forbade illegal cresses, he collected the revenue from the zamindars and the peasants with utmost cruelty.
Another result of his reforms was that many of the older zamindars were driven out and their place was taken by upstart revenue-farmers.
Murshid Quli Khan and the succeeding Nawabs gave equal opportunities for employment to Hindus and Muslims. They filled the highest civil posts and many of the military posts with Bengalis, mostly Hindus.
In choosing revenue farmers Murshid Quli Khan gave preference to local zamindars and mahajans (money-lenders) who were mainly Hindus. He thus laid the foundations of a new landed aristocracy in Bengal.
All the three Nawabs recognised that the expansion of trade benefited the people and the government and, therefore, gave encouragement to all merchants, Indian and foreign.
They provided for the safety of roads and rivers from thieves and robbers by establishing regular thanas and chowks. They checked private trade by officials.
They prevented abuses in the customs administration. At the same time they made it a point to maintain strict control over the foreign trading companies and their servants and prevented them from abusing their privileges.
They compelled the servants of the English East India Company to obey the laws of the land and to pay the same customs duties as were being paid by other merchants. Alivardi Khan did not permit the English and the French to fortify their factories in Calcutta and Chandernagore.
The Bengal Nawabs proved, however, to be short-sighted and negligent in one respect. They did not firmly put down the increasing tendency of the English East India Company after 1707 to use military force, or to threaten its use, to get its demands accepted.
They had the power to deal with the Company’s threats, but they continued to believe that a mere trading company could not threaten their power.
They failed to see that the English Company was no mere company of traders but was the representative of the most aggressive and expansionist colonialism of the time.
Their ignorance of, and lack of contact with, the rest of the world was to cost the state dear. Otherwise, they would have known of the devastation caused by the Western trading companies in Africa, South-East Asia, and Latin America.
The Nawabs of Bengal neglected to build a strong army and paid a heavy price for it. For example, the army of Murshid Quli Khan consisted of only 2000 cavalry and 4000 infantry.
Alivardi Khan was constantly troubled by the repeated invasions of the Marathas and, in the end; he had to cede a large part of Orissa to them.
And when, in 1756-67, the English East India Company declared war on Siraj-ud-Daulah, the successor of Alivardi, the absence of a strong army contributed much to the victory of the foreigner. The Bengal Nawabs also failed to check the growing corruption among their officials.
Even judicial officials, the qazis and muftis, were given to taking bribes. The foreign companies took full advantage of this weakness to undermine official rules and regulations and policies.