Mughal Empire started declining after the death of Emperor Aurangzeb. Under these circumstances Murshid Quli Khan became the first Nawab of Bengal. Though there was still the authority of the Mughals above him but he was nevertheless the first independent ruler of Bengal. The death of Aurangzeb was marked by a series of succession and in between 1707 to 1719 there were as many as eight Mughal rulers. This vulnerable situation was marked by the rise of three notable nobles namely Saadat Ali Khan of Oudh, Murshid Quli Khan the Nizam of Bengal and Qamar ud-din Khan of Deccan. Murshid Quli Khan of Bengal gradually united his force and position and in the year 1719 he renamed his capital city from Makhsusabad to Murshidabad after his name. This change of name was approved by the then Mughal emperor and thus Murshid Quli Khan became the Nawab of Bengal.

Early Life of Murshid Quli Khan
The early life of Murshid Quli Khan is rooted in obscurity. Nothing is known in certain about his family or parenthood. Among the many versions of his early life the most reliable account is that he was born of a poor Brahmin in the Deccan before being sold to slavery. He was bought by one Haji Shafi Isfahani, a merchant from Persia who converted him to Islam and changed his name Muhammad Hadi. He joined the services of Haji Abdullah, the Diwan of Berar and gradually came under the royal service of Emperor Aurangzeb.

Murshid Quli Khan`s Rise to Power
Emperor Aurangzeb was in search of an efficient man for being the Diwan of Bengal when his choice fell on Murshid Quli Khan. In the year 1701 he was sent to Bengal as the Diwan. Murshid Quli Khan was an honest officer and he had already served as a Diwan of the province of Orissa. He was efficient in his work and was praised among the imperial officials. Murshid Quli Khan was held unparalleled in goodness and morality of purpose. His services during the war placed him in the good books of Aurangzeb. The title of Murshid Quli Khan was bestowed upon him by Emperor Aurangzeb. During and after the reign of Aurangzeb, Murshid Quli Khan`s rise was noteworthy. Even after ascending the throne as the Nawab of Bengal, Murshid Quli Khan never broke his ties with the Mughals and continued to send annual tribute to Delhi.

Administration of Murshid Quli Khan
Murshid Quli Khan was an able and efficient administrator. As an administrative decision, Medinipur was estranged from Orissa and annexed to the Province of Bengal. In matter of collecting revenues Murshid Quli Khan made no compromise. The Hindu Zamindars suffered under him and were terrorised by the revenue collectors who were often ruthless. Under his rule the Zamindars were debarred from collecting the Imperial revenue and their sources of income were also limited to profits of tax free lands given in consideration for services rendered.

His administration in the matters of land reforms was also strict. He sent his men to every village and the cultivated and the waste lands were measured and were leashed back to the tenants plot by plot. Agricultural loans were meted out to the poorer section and he also and put forth effort for the augment in the produce of the lands. Thus Murshid Quli affected not only increase in revenue, but also increase in their `areas`. A part of the revenues was sent to the Imperial Treasury in Delhi. His administration was so dynamic and unbeaten that there was neither foreign invasion nor domestic disorder, and as a result the military expenses were nearly abolished. Murshid Quli Khan had a very powerful personality and his subjects sufficed to keep peace in the country. The Khan did not permit petty Zamindars admission to his presence. Murshid Quli Khan`s worthiness in administration of justice is amazing and notable. He contributed to a great deal in enhancing the material affluence of Bengal in terms of revenue.

Murshid Quli Khan died on 30th June 1727. He did not have a direct heir and so his maternal grandson Sarfaraz Khan succeeded him.