The act was passed in British Parliament to correct the defects of the previously signed
East India Company Act 1772 (
13 Geo. 3. c. 63). The 1772 act's purpose was to overhaul the management of the East India Company's rule in India, but proved to not be a long-term solution. The 1772 act set up a system where it supervised the work of the company but did not take power for itself. In 1781, both a selected and secret committee were set to go into the affairs of the company. This
select committee searched into the relations between the Supreme Court and the Council in Bengal, while the secret committee caused the Maratha War. The reports they presented were openly used as an arsenal for weapons against the company by party orators in Parliament. The act established the system of dual control of India and these changes continued through 1858. The company's territories In India were called the "British possession in India" for the first time. The British Government was given complete control over the company’s affairs and its administration in India. In the dual system of control, the company was represented by the Court of Directors and the British Government by the Board of Control. The act mandated that all civil and military officers disclose their property in India and Britain within two months of their joining. The Governor-General’s council's strength was reduced to three members. One of the three would be the Commander-in-Chief of the British Crown's army in India. The Governor-General was given casting vote. The Presidencies
of Madras and
of Bombay became subordinate to the
Bengal Presidency. In effect,
Calcutta became the capital of the
British possessions in India. Once the act was signed in 1784, there was more government control under Prime Minister William Pitt. This new act created a committee of six government appointees, known as the Board of Control, who were appointed to monitor and direct the company’s policies. Minister William Pitt became the youngest Prime Minister only at the age of 24. He was liked by many and was an amazing administrator who worked for efficiency and reform, to bring together a new generation of amazing administrators. Pitt’s India Act brought important changes in the constitution of the company. It constituted a department of state in England, also known as the Board of Control, whose purpose served to control the policy of the Court of Directors, introducing the Dual System of Government. It also placed the civil and military government of the company in due subordination to the Government in England. The act had many perks such as removing many of the faults that the
East India Company Act 1772 (
13 Geo. 3. c. 63) had. An example would be that it ended an unjust division of authority in India. By reducing the Governor-General council’s members to three, it removed any chance of there being a tie and the Governor-General would have the final say. The act also settled the main lines of the company’s Home and Indian Government. For example, the head of the board was at first the Secretary of State without a special salary, but after 1773 a special President of the Board was appointed and this officer was ultimately responsible for the government of British India until he was succeeded in 1858 by the Secretary of State for India. The act also was a very skilful measure bearing all the marks of a political compromise. However, the act had many shortcomings. The first being that it became obvious that the margins between government control and the company’s powers were hazy and personal. The Governor-General had to serve both the East India Company and the British Crown, which was set up for failure. The boundaries between the obligations of the Board of Control and the Court of Directors were unclear. The Governor-General had to make many sporadic decisions that deemed unfair to whoever it wasn't in favour towards. == Subsequent developments ==