Puzzle: outsized influence of a lakh of rupees

The East India Company Act of 1813 [1] set aside a sum of not less than a lakh of rupees per annum to be applied to the revival and improvement of literature and the encouragement of the learned natives of India, and for the introduction and promotion of a knowledge of the sciences among the inhabitants of the British territories in India.  

This munificent sum of one lakh of rupees corresponded to £10,000.  This was Macaulay's annual salary in India - a huge sum for an individual, to be certain.  In 1834-35, the year when Macaulay arrived in India,  the Haileybury College where British recruits to the company were sent for training cost the Company that year £9914 1s. 1d.;  "Maintenance of Lunatics formerly of Civil and Military Services of the Company" were that year a charge of £4991 13s. 9d. [2] Compare that to one lakh of rupees for promoting education in the whole of the Bengal, Madras and Bombay Presidencies.

That year, the proprietors of the East India Company paid themselves dividends of  £636,825 17s. 5d. [2].  The land revenue of Bengal & Agra alone was £11,601,350. [3]  {That year, the East India Company had a revenue of around £4.4million from the trade of opium.}

Why was this minuscule 0.09% of the land revenue of Bengal & Agra dedicated for education so significant?  It can only be because all the traditional systems of patronage of education - via lands whose revenue was dedicated to education, via the traditional rulers, via village revenues - had been destroyed by the East India Company. 



{ For a modern comparison, the US "No Child Left Behind" funding for 2012 was 0.5% of the federal revenues - 5.8 times larger in relative terms.  In addition, some of this funding is used as an incentive for states to increase their own funding of education.  Total government {local, state, federal} spending on K-12 schooling expressed as a percentage of federal revenues is 40+%. }

[1] Found on the web (South Dakota University's South Asia pages)

East India Company Act of 1813, section 43 

It shall be lawful for the Governor-General in Council to direct that out of any surplus which may remain of the rents, revenues, and profits arising from the said territorial acquisitions, after defraying the expenses of the military, civil, and commercial establishments and paying the interest of the debt, in manner hereinafter provided, a sum of not less than one lac of rupees in each year shall be set apart and applied to the revival and improvement of literature and the encouragement of the learned natives of India, and for the introduction and promotion of a knowledge of the sciences among the inhabitants of the British territories in India; and that any schools, public lectures, or other institutions for the purposes aforesaid, which shall be founded at the presidencies of Fort William, Fort St. George, or Bombay, or in any other part of the British territories in India, in virtue of this Act shall be governed by such regulations as may from time to time be made by the said Governor-General in Council; subject nevertheless to such powers as are herein vested in the said board of Commissioners for the affairs of India, respecting colleges and seminaries: Provided always, that all appointments to offices in such schools, lectureships and other institutions, shall be made by or under the authority of the Governments within which the same shall be situated. 

From: Bureau of Education. Selections from Educational Records, Part I (1781-1839). Edited by H. Sharp. Calcutta: Superintendent Government Printing, 1920. Reprint. Delhi: National Archives of India, 1965, 22. 

[2] Home Accounts of the East Indian Company, 1st May 1834-30th April, 1835, published 23rd July 1835.

[3] Table 83, page 105, Tables of the Revenue, Population, Commerce of the Unite Kingdom and its dependencies, Part V, 1835