Pakistan is a paradigm example of a failed state that has undergone an extremely dangerous form of radical Islamisation.
Renewal of Charter
After the separation of the Company’s commercial and political financial
accounts, tracking charges to Indian territorial revenues became somewhat
easier. Company accounts distinguished a class of territorial expenses incurred
in Britain that were chargeable to the Indian revenues. After the 1833 Charter
Renewal that abolished the Company’s commercial operations, calculating what
were called Home Charges become straightforward anything spent by the Company in
Britain was an expense for the Indian treasury. Whether all these charges
represented a transfer of wealth from India as a drain or tribute or whether
some or all should be considered payments for services rendered is a difficult
question and one that this paper cannot really answer. However, the impact of
the Home Charges upon Indian budgets between 1815 and 1859 is clear.
It was only after passage of the Charter Act of 1833 had closed India Company
trading operations that a shift occurred. After that date, the regime began a
systematic policy of building and improving public works. For example, the
regime invested 2.2 million sterling in improving three grand trunk roads:
Peshawar-Delhi-Calcutta; Calcutta to Bombay; and Bombay to Agra. In the 1850’s
the state began work for the first time on new irrigation projects. The Ganges
Canal that tapped into the perennial water flow of the Himalayan river sources,
finished in 1854, cost 1.4 million sterling. The Kaveri, Godavari and Krishna
river systems in the south were also completed.
These long-term East India Company fiscal data reveal several characteristic
features of the Company’s fiscal approach: First, decision-makers at home and in
India were bent on creating a usable revenue surplus each year suitable for
commercial investment (until 1833) and paying dividends to the holders of East
India Company stock. To do so, they raised their revenue demands in each
territory acquired to levels equal to the highest assessments made by previous
Indian regimes. Second, those surpluses produced were never adequate to meet the
combined administrative, military and commercial expenses of the Company. Third,
the Company resorted to borrowing on interest-bearing bonds in India and at home
in steadily rising amounts to meet its obligations. Fourth, the escalating cost
of the East India Company armies and of incessant warfare formed the greatest
single fiscal burden for the new regime. Finally, the Company allocated
negligible funds for public works, for cultural patronage, for charitable
relief, or for any form of education. The Company confined its generosity to
paying extremely high salaries to its civil servants and military officers.
Otherwise parsimony ruled. These characteristics marked the East India Company
fiscal system from its inception to its demise in 1859.
