The East India Company became the real master of Bengal at least from 1765. Its army was in sole control of its defence and the supreme political power was in its hands.
The Nawab depended for his internal and external security on the British. As the Diwan, the Company directly collected its revenues, while through the right to nominate the Deputy Subahdar, it controlled the nizamat or the police and judicial powers.
This arrangement is known in history as the ‘dual’ or ‘double’ government. It held a great advantage for the British: they had power without responsibility.
The Nawab and his officials at the responsibility of administration but not the power to discharge weaknesses of the government could be blamed on the Indians while its fruits were gathered by the British. The consequences for the people of Bengal were disastrous: neither the Company nor the Nawab cared for their welfare.
The Company’s servants now had the whole of Bengal to themselves and their oppression of the people increased greatly. We can quote Clive himself:
I shall only say that such a scene of anarchy, confusion, bribery, corruption, and extortion was never seen or heard of in any country but Bengal; nor did such and so many fortunes acquire in so unjust and rapacious a manner.
The three provinces of Bengal, Bihar, and Orissa, producing a clear revenue of £3 millions sterling, have been under the absolute management of the Company’s servants, ever since Mir Jafar’s restoration to the subahship; and they have, both civil and military, exacted and levied contributions from every man of power and consequence, from the Nawab down to the lowest zamindar.
The Company’s authorities on their part set out to gather the rich harvest and drain Bengal of its wealth. They stopped sending money from England to purchase Indian goods. Instead, they purchased these goods from the revenues of Bengal and sold them abroad.
These were known as the Company’s Investment and formed a part of its profits. On top of all this the British government wanted its share of the rich prize and, in 1767, ordered the Company to pay it £400,000 per year.
In the years 1766, 1767 and 1768 alone, nearly £5.7 million were drained from Bengal. The abuses of the ‘dual’ government and the drain of wealth led to the impoverishment and exhaustion of that unlucky province.
In 1770, Bengal suffered from a famine which in its effects proved one of the most terrible famines known in human history.
People died in lakhs and nearly one-third of Bengal’s population fell victim to its ravages. Though the famine was due to failure of the rains, its effects were heightened by the Company’s policies.