ABSTRACT
The most urgent task faced by the secretary of state and viceroy was the reorganization of the British Indian army and the civil bureaucracy so that the colony might once again play its crucial role in substantiating Britain's imperial dominance. So the state in India during the high noon of colonialism developed some novel institutional features. Colonial capitalists now preferred the credit mechanism rather than the revenue and rent structure of the state as the main channel of appropriating the agrarian surplus. Metropolitan imperatives invariably took precedence over the financial and political needs of the colonial state. Reordering of the political economy of colonial India was as important as restructuring the institutions of the state. It is in the period from 1858 to 1914 that Britain is generally seen to have been able to extract solid strategic and economic advantages from its prize colonial possession.
