The administration during the reigning period of Mir Osman Ali Khan was the period when the state had undergone a drastic change in almost all sectors of administrative fields along with cultural reformations. Apart from this, under the leadership of Osman Ali Khan, Hyderabad began to play a leading role in the politics of India.
The years of the tenure of some British officers coincided with the early part of Mir Osman Ali Khan`s rule (1912-18). This period may be divided into two distinct parts: first, 11 July 1912 to December 1914 - the ministry of Mir Yusuf Ali Khan, Salar Jang III and secondly December 1914 to December 1918, when Mir Osman Ali Khan was acting as his own minister. The first part of the period, was characterised by the stopping of the intrigues conducted by the Paigah nobles and certain high officials including the minister Maharaja Sir Kishan Parshad, whose objective was to replace Mir Osman Ali Khan by Salabat Jah, the second and favourite son of the late Nizam, Mir Mahboob Ali Khan
The general impression which the Nizam gave at the time of this crisis to responsible officers, both British and Indian, was that he had begun to develop an extraordinary aptitude for business and was already showing a keen sense of responsibility. In supervising the estate, the wise and moderate attitude of the Nizam was evidenced. The administration in Hyderabad
during the period of Mir Osman Ali that it was a personal monarchy, to a certain extent modified by the existence of a Chief Minister with an Executive Council, as instituted by the Qanuncha-i Mubarak of 1892, and supplemented by the Qanuncha regulations of 1898. Moreover, it is to be observed that the objective of the Hyderabad administration at that time was not merely to carry out the whims of the monarch, irrespective of the true interests of the state and the welfare of its people, but that its primary function was to secure the good of the state and its people. This ideal of the Hyderabad government is clearly demonstrated by the stress that was laid on the agreement signed by Mir Yusaf Ali Khan Salar Jang III at the time of his appointment to build up and improve the finances of his state and to abide strictly by the rules and regulations of the Qanuncha.
Mir Osman Ali Khan was a man of remarkable energy and intelligence and he devoted his personal attention to the minutest details of administration. The Nizam did not rest content by merely appointing Syed Husain Bilgrami as Salar Jang`s adviser; but saw that this condition was strictly adhered to by Yusuf Ali Khan that the latter should not carry out any public duties without prior consultation with Syed Husain Bilgrami or Faridunji. Admittedly, this was sometimes effected by a rather exaggerated misuse of the age-old customs like the nazars or of some loopholes in the administration. However it must be accepted on all sides, even by his most severe critics, that in addition to the expert devices and genuine efforts of Sir Reginald Glancy to improve and build up the finances of the Hyderabad state, it was the strenuous efforts, unremitting endeavours and the personal initiative of the seventh Nizam, even though this endangered his personal popularity with the high dignitaries and the nobles of his state, which led to the achievement of the financial stability of Hyderabad. Such financial stability of Hyderabad had not been attained even under the Great Diwan, Salar Jang I or His Late Highness Nawab Mir Mahboob Ali Khan. It was again the recurrence of the financial breakdown of Hyderabad in 1902, which had resulted in the signing of the treaty of Permanent Lease. This treaty, by depriving Hyderabad of its rich and strategically important territories had a crucially adverse effect on the destiny of Hyderabad state which it changed from a self sufficient unit, economically viable, and strategically possessing a strong defensive frontier, to one dependent for its economy and for its defence on the rest of India.
In tackling the all important question of the financial solvency of his state, Mir Osman Ali Khan first turned his attention towards the problem of the heavy indebtedness of the Hyderabad nobility as a class, owing to their habits of loose living and undue extravagance. The greatest reform which Mir Osman Ali Khan carried out in the financial field, was the appointment of commissions to investigate the misappropriation and mishandling of government funds under different heads by the dignitaries and highranking officers of the state. An instance of this type of investigation to cleanse the Augean stables which Osman Ali carried out, was the commission which was appointed by the seventh Nizam, consisting of Maulvi Muhammad Habibuddin and Mr Giri, to investigate the mishandling of Government money by the commander-in-chief of the Hyderabad Regular forces, Colonel Afsarul Mulk and his son Major Osman Yarud Daulah, who had held an equally important post of A.D.C. to His Highness and commander of his Golconda forces. Moreover, the Seventh Nizam`s measures to reform the upper class of society could by no means be regarded as a policy of hostility or revenge towards this class. The seventh Nizam, like his father, was very particular that the `mansabdars`, before adopting any prospective careers for themselves, should obtain his prior permission.
Before leaving the causes for Osman Ali Khan`s unpleasant relations with the ruling class and aristocracy on financial grounds, it is worth observing that the humanitarian aspect of the seventh Nizam`s personality also disturbed the aristocracy like Lady Viqarul Umara, who regarded the Nizam`s interference into their private affairs as an infringement of their personal liberty.
In addition to these, the tenure of Mir Osman Ali saw the development in the finance, as in the revenue department. The period of the early regime of the Seventh Nizam marked rapid progress and development. This department throughout the history of the Hyderabad state in the nineteenth and the early part of the twentieth centuries had been notorious for its corruption and pilferage as soon as the strong hand of an Englishman was removed from its head. It was under the late Nizam, Mir Mahboob Ali Khan, that the revenue department was reorganised by him in 1907. This reorganisation not only meant the re gradation and re fixing of the salaries of the revenue officers like the Taluqdars and the Tahsildars, but they led to an increase in the income of the various branches of the revenue department such as the excise, the forests and the customs, by the elimination of the Jagir competition and the gradual establishment of complete Government control over all sections of the department. In 1910, in view of his sincere and strenous endeavours to improve the department, Dunlop was appointed the Director General of revenues, the post which he held till 1914 when he retired from the Nizam`s service.
Along with the consolidation of finances and the elimination of corruption from the revenue department, the Hyderabad state during the pre war years, namely, Mir Osman Ali Khan`s early regime, presented a complete picture of law and order. Not only this preserved peace and security for the inhabitants of the city and districts of Hyderabad state, but also secured the British Indian Provinces from the danger of the Hyderabad state becoming the headquarters of anti-British agitation in India.
Further, another obvious reason for Hyderabad presenting a picture of perfect law and order was that, at this time, (1912-1913) the Hyderabad judicial reforms were carried out; and the Hyderabad judicial service was organised on the pattern of the judiciary, set up in the British Indian provinces. Thus Hyderabad provided a model judicial pattern for the other Native states of India. Mir Osman Ali Khan`s regime during this period has also an illustrious record in the annals of great irrigation projects, particularly the construction of the great Musi dam, which saved the Hyderabadis from the disastrous natural calamities caused by the frequent flooding of the river Musi on which the city of Hyderabad is situated. The Foundation stone for the great Osman Sagar tank, one of the largest in India, was laid by the seventh Nizam on 18 Ardibehisht 1322 Fasli (1912). This period also saw the beginning of the construction of the Laknawara and Ramappa Lakes and the Pandnipakala and the Ganga Katua projects. All these projects not only added greatly to the fertility of Hyderabad
state; but they were also instrumental in providing the peoples of Hyderabad with the basic amenities of life.
In addition to the building of the great irrigation projects which led to the rapid economic development of the country, this early period of Osman Ali Khan`s reign was also memorable for linking up the most distant parts of the Hyderabad Dominions, by not only laying out new railway lines - a work which had already started under Salar Jang I and the late Nizam Nawab Mir Mahboob Ali Khan, but by spreading a network of metalled roads connecting the districts with Hyderabad city. This network of roads aimed particularly at connecting the chief towns of the districts with Hyderabad city as well as connecting every part of each district with its chief town. In spreading this network of good roads throughout the districts the personal interest and the supervision of the ruler played a noted role. It was this personal interest and supervision by the Nizam of all the nation`s building activities, which led to the rapid change of Hyderabad from a medieval state to a modern state, well abreast in terms of progress with the advanced provinces of British India, and far head of the other Princely States of India.
Besides these reformations and modernisation in the state of Hyderabad, it was during this early period of Osman Ali Khan`s regime, namely, during the ministry of Salar Jang III, that constructive steps were taken for the preservation of ancient monuments and the revival of an interest in the ancient culture of the Deccan by the organisation of the department of archaeology in April 1914. This interest in the revival of the ancient culture of the Nizam`s Dominions is to be linked with the constructive steps taken, during the Viceroyalty of Lord Curzon
, for the preservation of the great monuments of the ancient and medieval period and of the revival of an interest in the past culture of India, on a countrywide basis, by the organisation of the Department of Archaeology of the Government of India. It was during Osman Ali Khan``s period, that the department of archaeology was organised at the instance of Sir John Marshall, the then Director General of Archaeology, Government of India, with the cooperation of Sir Alexander Pinhey, the then Resident of Hyderabad.
At the same time due regard must also be paid to the innate interest which Osman Ali Khan showed in the preservation of the ancient culture of his dominions long before the department was actually organised. He was behind the sanctioning of a large sum of money for enlarging the minarets of the famous Qutub Shahi mosque, the Makka Masjid, etc. Thus, it could be seen that it was this broad and liberal attitude of the ruler and the personal interest taken by him in the activities of this Department, that enabled the archaeological department of Hyderabad to play such an outstanding role in the preservation of the ancient and medieval culture of the Deccan along with the preservation of the world famous frescoes of Ajanta and Ellora.
The Seventh Nizam was eager to preserve the old relics of his dominions and he was equally zealous to add new magnificent edifices. Later he sanctioned money generously for the completion of such works. The Nizam took equally great pride in the achievements of his house, the Asafia dynasty. He particularly wanted to keep intact the traditions of his late father, Nawab Mir Mahboob Ali Khan. From the time of his early reign, Osman Ali Khans scientific, literary and architectural activities were not restricted to the four walls of his own dominions, but as head of premier Princely State of India, his patronage of art and architecture stretched not only throughout India, but to the other sacred places of the Muslim world as well. He approached the Nizam`s Government for the grant of large sums of money for the foundation of the Unani and Ayurvedic medical Colleges in Delhi
. Another example of Osman Ali Khans activities in renovating and adding splendor to the historical sites of the sub-continent of India was that during his visit to the Mausoleum of the great Chishti saint at Ajmer Sharif, he instructed the Secretary of his Privy Purse at Hyderabad to send for the Chief Engineer of the State, Mir Ahmad Ali otherwise known as Ali Nawaz Jang and instruct him to carry out necessary repairs to the mosque at Ajmer
, built by the Emperor Shah Jahan
The Seventh Nizam was equally prompt to contribute a handsome grant, on behalf of his Government, towards the foundation of the Madina University at Madina. He was like all his predecessors of the Asaf Jahi Rule, followed a policy of broad tolerance towards all religions and religious sects amongst his people.