Why did East India company incurr financial burden during welleslys reism
Answers
The East India Company struggled financially for much longer than the end. The Company won the Battle of Buxar (1764) and was awarded the overlordship of Bengal, immediately finding itself in need of trained administrators. The Company was struggling with debt during the last century or so of its existence; the very reason for the annexation of Bengal itself was an attempt to balance the Company books. Taxes were collected with a degree of uncertainty, despite moves by the Company in 1772 to central revenue collection and in 1773 to reduce corruption. This may have exacerbated the Bengal famine (1769–70), which claimed the lives of 7–10 million people. The situation spiralled out of control and the Crown was forced to enact direct rule in 1858. The Company inherited the tax system used by the former Mughal Empire, meaning that the majority of the burden was given to farmers and one-third of the revenue collected was for Company or Crown use, most of which went towards the upkeep of the Company’s private armed forces and the production of tea and spices. However, the Company’s use of an outdated revenue system and frequent debts meant that it could not administer India effectively.