Economic crisis of the Nizams
- In the year 1812, a permanent Hyderabad Contingent was set up in Secunderabad. Its expenses were financed entirely by the Nizam.
- Sikandar Jah (1768 - 1829) took significant loans at absurdly high-interest rates from William Palmer & Co. in order to meet the required cost of maintenance. Considering these financial dealings detrimental to the prosperity of the Nizam’s government and to British interests in the region, the East India Company intervened.
- In addition, William Palmer & Co. collapsed and the state’s finances continued in a deplorable condition. Even though the Nizam drew upon all the possible resources, including his personal wealth, for the upkeep of the troops, Hyderabad was perpetually in debt to the British.
- The British agreed to let go of the Nizam’s dues in exchange for Nizam Nasir-ud-Daula ceding the districts of Berar, Raichur and Bhir permanently to the British. The expenses of the Secunderabad Contingent were henceforth met by the British.
- The Asaf Jahi fortunes saw some improvement in the later years of Nasir-ud-Daula’s reign due to the efforts of Salar Jung I.
- Salar Jung I negotiated with the British and succeeded in regaining the Raichur Doab.