The correct option is (a).
Explanation
The grant of Diwani rights in 1765 was a watershed moment in the history of British rule in India. Following the Battle of Buxar (1764), the Treaty of Allahabad was signed, which fundamentally altered the East India Company's role from a mere trading entity to a political power with revenue-collecting authority.
Statement-wise Analysis
- Statement 1 is Correct: In 1765, the Mughal Emperor Shah Alam II appointed the East India Company as the Diwan of the provinces of Bengal. This grant gave the Company the right to collect revenues from Bengal, Bihar, and Odisha, formally integrating them into the Mughal administrative framework as revenue collectors.
- Statement 2 is Incorrect: The Diwani rights did not restrict the Company; rather, they allowed the Company to utilize the vast revenue resources of Bengal to finance its trade and other expenses. The revenue collected was used to purchase cotton and silk textiles in India, maintain Company troops, and meet the costs of building the Company’s forts and offices in Calcutta.
- Statement 3 is Incorrect: Before 1765, the Company had to import gold and silver (bullion) from Britain to purchase goods in India because Britain had no goods that were in demand in India. After the assumption of Diwani, the outflow of gold and silver from Britain to India slowed down and eventually stopped. The revenue from Bengal was sufficient to finance the purchase of export goods (referred to as the Company's "Investment").
Key Takeaway: The acquisition of Diwani rights (1765) transformed the East India Company's financial model, allowing it to stop importing bullion from Britain and instead use Indian revenues to finance the purchase of Indian goods for export.