20. The East India Company was responsible for collecting taxes from Indian subjects
Beginning in about 1765, Robert Clive delegated the collection of taxes from Indian subjects to Indian deputies, who were paid by taking a commission based on the total amount collected. It was a system that was obviously ripe for corruption. After Clive left India for the final time, taking a vast amount of personal wealth with him, Warren Hastings was made governor-general for all of the company’s holdings in India, and Indian collection of taxes was eliminated, with the responsibility for revenue collection in the hands of company employees.
Some of the company employees hired by Hastings were from the native population, a practice he observed in the company armies and applied to its civilian employees as a means of assuring loyalty. Hastings was accused of corruption and his seven-year investigation and trial in England resulted in his being acquitted. He was awarded a 4,000 pounds annual payment by the company for the rest of his life. Under his administration of India, he unwittingly allowed the caste system to be solidified by employing high-caste scholars to advise the British in the writing of the body of law. He was followed as governor-general by Charles Cornwallis, who dismissed the Indians in the company’s service.