Can you explain how, after acquiring Diwani, the government of the East India Company functioned like “an Indian ruler”?

Answer:

After the grant of Diwani in 1765, the East India Company obtained the right to collect revenue in Bengal, Bihar and Orissa. Though it remained a European trading corporation, in practice it began to function like an Indian ruler because it controlled revenue, administration and political authority.

Company as Revenue Sovereign

Diwani rights:

• The Company collected land revenue and managed civil finances.
• Revenue became the foundation of its army, trade and administration.
• Like Indian rulers, it depended on agrarian surplus.

Use of Indian Forms

Dual government:

• The Nawab retained nominal nizamat functions, while the Company controlled finance.
• Indian officials such as amils, qanungos and revenue intermediaries continued to be used.
• Persian administrative forms and Mughal legal idioms survived for some time.

Political and Military Authority

Control over nawabs:

• The Company made and unmade Bengal nawabs after Plassey.
• After Buxar and Diwani, it became the real power behind formal authority.
• It maintained armies from Indian revenues.

Extraction and Patronage

Indian-style fiscal state:

• The Company collected tribute, revenue and commercial privileges.
• It distributed offices, contracts and patronage.
• Its servants behaved like power-holders in an Indian courtly system.

Therefore, after Diwani, the Company was no longer merely a merchant body. It functioned like an Indian ruler by collecting revenue, controlling political authority and using existing administrative structures, though its ultimate purpose remained colonial profit.