2. Pitt’s India Act of 1784

♤ Commercial and political functions of the company were separated. The Court of Directors managed the commercial activities while the Board of Control managed political affairs.

♤ The Board of Control in England was mandated to supervise the East India Company's affairs. It consisted of six members, which included one Secretary of State from the British cabinet, as well as the Chancellor of the Exchequer.

♤ The Act reduced the number of members of the Executive Council to three, of whom the Commander-in-Chief was to be one. It also modified the Councils of Madras and Bombay on the pattern of that of Bengal.

♤ It empowered the Board of Control to supervise and direct all operations of civil and military revenues of the British possessions. Thus, it paved the way for evolution of dual government.

♤ The Company’s territories were for the first time called ‘British possession in India’.