The Revolt of 1857 gave a severe jolt to the British administration in India and made its reorganization inevitable.

Central Government:

• An Act of Parliament in 1858 transferred the power to govern from the East India Company to the British Crown.
• While authority over India had previously been wielded by the Directors of the Company and the Board of Control, now this power was to be exercised by a Secretary of State for India aided by a Council.
• The Secretary of State was a member of the British Cabinet and as such was responsible to Parliament. Thus the ultimate power over India remained with British Parliament.
• Under the Act, a government was to be carried on as before by the Governor-General who was also given the title of Viceroy or Crown’s personal representative.
• In India, the Act of 1858 provided that the Governor-General would have an Executive Council whose members were to act as heads of different departments and as his official advisers.
• The position of the members of the Council was similar to that of Cabinet ministers. Originally there were five members of this Council but by 1918, there were six ordinary members, apart from the Commander-in-Chief who headed the Army Department.
• The Indian Councils Act of 1861 enlarged the Governor-General’s Council for the purpose of making laws in which capacity it was known as the Imperial Legislative Council.
• The Governor-General was authorized to add to his Executive Council between six and twelve members of whom at least half had to be non-officials who could be Indian or English.
• The Imperial Legislative Council possessed no real powers and should not be seen as a sort of elementary or weak parliament. It was merely an advisory body. It could not discuss any important measure, and no financial measures at all, without the previous approval of the Government
• The Imperial Legislative Council had no control over the budget. It could not discuss the notions of the administration; the members could not even ask questions about them. The Legislative Council had no control over the executive.

Provincial Government:

• The Act of 1861 marked the turning of the tide of centralization. It laid down that legislative councils similar to that of the center should be established first in Bombay, Madras, and Bengal and then in other provinces.
• The provincial legislative councils also were mere advisory bodies consisting of officials and four to eight non-official Indians and Englishmen. They also lacked the powers or a democratic parliament.?
• The evil of extreme centralization was most obvious in the field of finance. The revenues from all over the country and from different sources were gathered at the center and then distributed by it to the provincial governments.
• In 1870, Lord Mayo had taken the first step in the direction of separating central and provincial finances.
• Lord Mayo’s scheme was enlarged in 1877 by Lord Lytton who transferred to the provinces certain other heads of expenditure such as Land Revenue, Excise, General Administration, and Law and Justice.