History and Background
The Act was the British Parliament's statute of governing control of Indian Colonies of British East India Company. ( Mostly in Bengal )
It was the British government's first action in the company's territorial affairs and the start of a takeover process that would last until 1858. The Regulating Act was established in response to the company's mismanagement of its Bengal holdings, which was brought to a head by the possibility of collapse and the company's demand for a government loan.
The legislation is intended to "control" the company's operations. It was enacted in both London and India.
Key Features
It called for the establishment of a Governor-General of Fort William in Bengal with authority over the Madras and Bombay reigns.
The Governor-General ruled over a four-member council and was granted a casting vote but no veto power.
A supreme court was to be established in Calcutta (1774) with a chief justice and three chief justices.
The act prohibited the servants of the company to engage in any kind of private trade / accepting presents and bribes.
The act increased the power of the British Government over the company by compelling the court of directors to report to its revenue, civil, and military affairs in India.
Causes
Before reforming the company's policies and controlling the Company's authoritative power over the territory of British Governmental Rule in India, the legislation had certain final causes:
The deteriorating financial condition of the company and its heavy debts.
Corruption among the company's servants,
Difficult administrative challenges associated with the dual government
In India, public sentiment against the company gained momentum.
Inadequate judicial administration,
Absence of a centralised authority to direct and oversee the Company's operations,
Company's defeats in 1769 at the hands of Mysore's Haider Ali
In Bengal, a terrible famine took a tremendous toll on the population.
In 1772, the firm filed for a one-million-pound loan.
Way Forward
In the United Kingdom, yearly elections of 24 directors were replaced by annual elections of six judges, whose terms were increased from one to four years with a one-year gap before re-election, and the voting threshold was increased from £500 to £1,000.
This move makes it more difficult for private groups to exercise influence over public policies and institutions through voting fraud. This also brought a stop to the collec