How did the Assumption of Diwani Benefit the East India Company?

In 1765, the British East India Company acquired the Diwani rights from the Mughal Emperor Shah Alam II. The Diwani rights were basically the right to collect profit from the businesses of Bengal, Bihar, and Orissa, which were inclusively known as the Bengal Presidency. This was a significant moment in the history of British India, as it marked the morning of the company’s direct involvement in Indian administration and established the base of British rule in India.

Diwani Rights

Diwani Rights

The Diwani rights were acquired by the East India Company after the Battle of Buxar in 1764. The battle was fought between the East India Company and the concerted forces of the Mughal Emperor Shah Alam II, the Nawab of Awadh, and the Nawab of Bengal. The Company surfaced victoriously and forced the Mughal Emperor to grant the Diwani rights to them.

The Diwani rights allowed the East India Company to collect profit from the Bengal Presidency, which was a major source of wealth in India at the time. The profit was collected in the form of land duty, customs duties, and other freights. The East India Company was also responsible for the administration of justice in the region and had the power to appoint officers and judges.

Features of Diwani Rights

One of the most significant features of the Diwani rights was the establishment of a new system of profit collection. The East India Company introduced the endless agreement System, which fixed the land duty at a certain rate and made it heritable. This system was designed to give stability to the profit collection process and was intended to profit both the East India Company and the original coproprietors. The endless agreement System, still, had some negative consequences for the peasants and growers who were the factual tillers of the land. The fixed land duty rate meant that the profit collection process was inflexible and didn’t take into account changes in agrarian productivity or other factors that affected the income of the growers. This redounded in wide neediness and debt among the peasantry.

Another significant point of the Diwani rights was the establishment of a new class of profit officers who were responsible for the collection of profit and the administration of justice. These officers were known as zamindars and were given heritable rights to collect profit from specific areas. The zamindars were frequently members of the original quality and were given considerable powers to maintain law and order in their separate areas. The establishment of the Zamindari system was intended to give a stable and effective system of profit collection, but it also had some negative consequences. The zamindars frequently abused their powers and assessed onerous levies on the peasants and growers. They also constantly banded with the British authorities and helped to suppress popular revolutions and movements against British rule.

East India Company’s Rise to Power in Bengal 

During the first half of the 18th century, pressures between the East India Company and the Nawabs of Bengal boosted. In order to maximize their gains, the East India Company abused their formerly- granted boons. They compelled the Mughal emperor Aurangzeb to issue a farman to gain the right to duty-free trade. The farman, which banned officers from engaging in private trade and subjugating them to duties, only authorized duty-free trade.

In spite, Bengal suffered a considerable financial loss as a result of their failure to pay. After Aurangzeb’s death, the Bengal Nawabs declared their independence and supremacy. They forced the East India Company to pay homage and banned it from constructing castles or minting plutocrats. Likewise, they refused to grant the company any boons, professing that the East India Company’s dishonesty had caused Bengal to lose plutocrats, which had eroded the Nawabs’ authority.

The East India Company, seeking to undermine the Nawabi powers, transferred affronting letters and withheld payments from the Nawab. They claimed that the illegal demands of original officers had a mischievous impact on trade and that duties had to be abolished for trade to flourish. The East India Company believed that it was necessary to expand their colonies, buy the townlets, and patch the castles to increase trade. The British’s influence in India began to rise after the Battle of Plassey in 1757. In 1765, the Mughal emperor appointed the East India Company as the Diwan of Bengal, granting them direct control over the administration and coffers of the region. Accordingly, the East India Company significantly employed Bengal’s coffers. They had formerly increased their trade with India from the morning of the 18th century, as they had nothing to offer India except tableware and gold, which were imported from Britain.

Conclusion

In conclusion, the accession of Diwani rights was a pivotal turning point in the history of the East India Company’s expansion in India. The Company’s control over Bengal’s coffers allowed them to sew up the trade of precious goods, which gave them a significant advantage in global trade and helped to fuel the artificial revolution in Britain. still, the exploitative programs and heavy taxation assessed by the Company had negative impacts on Indian society and frugality. 

This period also marked the morning of British social rule in India, which had a continuing impact on the country. The accession of Diwani rights eventually served the East India Company, but it came at a heavy cost for the Indian people.

Related Links

1. Diwani Rights
2. Dual Government of Robert Clive
3. Company Becomes the Diwan
4. British Control Over the Bengal

FAQs on Diwani Rights Benefit Britishers

Q 1. Who introduced the Diwani rights?

Answer-

Shah Alam II granted the diwani rights to the East India Company after the defeat in the Battle of Buxar.

Q 2. What was the effect of Diwani’s Rights?

Answer-

The British were granted the right to collect taxes and settle civil issues through the diwani rights.

Q 3. Which treaty gave the Diwani to the British?

Answer-

The Treaty of Allahabad granted diwani to the British.