Robert Clive set up the infamous dual system of government administration in Bengal after the Treaty of Allahabad (1765).
Under the ‘dual’ or double government system, the Company got both the Diwani (revenue) and Nizamat (civil administration) functions of Bengal from two different sources- Diwani from the Mughal emperor and Nizamat from the Nawab of Bengal.
The Company was authorized to collect revenues of the province as the diwan, while through the right to nominate the deputy subahdar it was in a position to control the Nizamat or the police and judicial powers. The deputy subahdar could not be removed without the consent of the Company.
Under this system, the Nawab continued to handle the actual work of criminal, civil and police administration in lieu of a fixed payment by the Company.
This was a government system in which the native administrators held responsibility while the British enjoyed the authority or in other words, authority was completely divorced from responsibility. Bengal now had two masters-the the nawab and the Company. The Nawab was responsible for general administration, maintenance of law and order, and justice (i.e., criminal cases). The Company had military power and the right to collect and use the revenue of Bengal. This arrangement was known as the Dual Government.
The company had no responsibilities and enjoyed power. On the other hand, the Nawab was burdened with the responsibility of administration without the resources necessary for running it efficiently i.e.responsibility without power.Indian officials were appointed by the company to collect the revenue.The greed, corruption and oppression of these officials left the peasants in conditions of utter misery.The company was indifferent to the people's welfare.
> rampant corruption among servants of the Company who made full use of private trading to enrich themselves;
> excessive revenue collection and oppression of peasantry;
> the Company went into loss, while the servants were flourishing.
The Dual Government in Bengal failed miserably. It destroyed the trade, industry, and agriculture of Bengal.
The Company also did not remain unaffected by the evils of its administration. Its income both from revenue and trade suffered. The practice of private trade by servants which remained the primary concern of company also proved disastrous to the fortunes of the Company.
Later When Bengal was hit by a terrible famine, the conditions of the people worsened, and one third of the population perished.Neither the company nor the Nawab, who in any case had neither the authority nor the resources to do so, took steps to help the people.The Company, through its power to nominate the deputy Nawab, only interfered in the general administration without taking on any responsibility.The evils of the Dual Government began to manifest themselves.The administration and economy collapsed.
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