(i) After 1813, the British economy and society were going through a major transformation, caused mainly by the Industrial Revolution. The commercial trading corporations were now giving way to industrial ownership which had become the dominant force in the British, society.

(ii) The East India Company was gradually losing its monopoly over Indian trade.

(iii) The British interests in India no longer represented the interests of the Company but of the industrial capitalist class. The interest of the British industrialists lay in using India as (a) a market for their manufactured industrial goods, (b) a source of raw materials like (jute, cotton etc.) for their industries and food grains, opium etc. for export.

(iv) All this required much greater penetration into the Indian economy and society and control over Indian trade not only with British but with other countries also. India was now expected to play a new role. It was perhaps not possible to perform the new role with the traditional administrative institutions. They had to be changed and transformed to suit the new requirements. Thus started the process of transforming Indian administration.

(v) Similarly, the entire legal structure had to be overhauled to promote modern business, create a market economy, free commercial relations and to regulate the various economic transactions smoothly with the help of modern laws.