chapter  2
17 Pages

Race and reform

In 1687, the directors of the East India Company first raised the idea of acquiring revenue from taxation for the purposes of sustaining permanent settlement in India. Their vision of establishing ‘a Politie of civill and military power’ and ‘the foundation of a large, well-grounded sure English dominion in India for all time to come’1 was largely premature and impractical since the rationale of the Company was aimed solely at securing a commercial foothold. Supporting permanent colonies at the expense of shareholders would not be a popular move in an operation that sought to exploit the abundant natural resources of the East Indies. The Company wanted trading relations with the Mughal Empire from the beginning of its activities and initially recognized the sovereignty of the emperor in exchange for a firman, which was a trading permit bestowed upon a foreign commercial entity in the form of an imperial edict. Through its control of both imports and exports, the chief aim of the Company was to extract the maximum amount of profit possible in order to increase the value of its shares in the domestic market.2 Trade remained the strategic priority despite the move of the Company’s main operations from Surat to Bombay and the practical uncertainties caused by the political disintegration of the Mughal Empire. It was not until 1765 when the Company was granted the diwani of Bengal, Bihar and Orissa that it actually started to raise and manage taxation revenues, but on behalf of the Mughal emperor to whom the Company now started to nominally represent in its dealings with other powers.3