Question 4 from UPSC CSE 2019 - Modern History

Question

Consider the following statements about 'the Charter Act of 1813':
1. It ended the trade monopoly of the East India Company in India except for trade in tea and trade with China.
2. It asserted the sovereignty of the British Crown over the Indian territories held by the Company.
3. The revenues of India were now controlled by the British Parliament.
Which of the statements given above are correct?

IASCODEX · Accepted Answer

Correct Option: A. 1 and 2 only

Strategy: Focus on whether the Act ended the Company's trade monopoly—statement 1 fits the key fact, as monopoly persisted only for tea and China trade. Statement 2 is also accurate: the Act clearly inserted Crown sovereignty language. However, statement 3 presents a factual error—revenues were not directly handed over to British Parliament (this occurred only later in 1858). By eliminating the incorrect revenue control claim, the right answer is option A.

Key Info: Charter Act of 1813:
- The Charter Act of 1813 was an act of the British Parliament that renewed the East India Company's charter for another 20 years but ended its trade monopoly in India except for the tea trade and trade with China. This opened Indian trade to all British merchants except those two cases.
- The Act for the first time asserted in statutory terms the sovereignty of the British Crown over Indian territories managed by the Company, though actual governance and administration remained with the Company till 1858.
- The Act required the Company to maintain separate accounts for commercial and territorial functions but did not transfer direct control over Indian revenues to the British Parliament; financial and administrative control by the Crown and Parliament increased gradually over subsequent decades, culminating only with the Government of India Act 1858, when Parliament assumed direct control.
- The Act provided a sum of 1 lakh rupees annually for the promotion of education and allowed Christian missionaries to legally enter and propagate in Company territories.
- Dividends to Company shareholders were fixed, and certain legal restrictions on British subjects in India were removed.
- The administration of India continued with the Court of Directors and Board of Control overseeing Company affairs on behalf of the Crown.

IASCODEX · Answer

Option B: 2 and 3 only

IASCODEX · Answer

Option C: 1 and 3 only

IASCODEX · Answer

Option D: 1, 2, and 3