Provincial Administration of Bihar was authorized in the Charter Act of 1853. The Charter Act of 1853 certified the Directors to constitute a new Province or to appoint Lieutenant-Governor.

Bengal was placed under a Lieutenant Governor in 1854 and this arrangement lasted till 1912 when it was again raised to the status of a full-fledged Governorship. Bihar was placed under a Lieutenant Governor in 1912 and subsequently under a Governor. Under the regime of British East India Company, the Provincial Governor had huge powers and he was the chief authority. He was the President of the Executive Council. He had the power to summon, prorogue or dissolve the Legislative Council and to order fresh elections. His permission was necessary for the introduction of private members` resolution for discussion in the Council He possessed the powers of certification against Legislature with regard to all bills including money-grants. The Act of 1919 introduced the system of Dual Government in the Provinces. There was an Executive Council in each of the Governor`s Province after 1919.

The Ministers were normally selected by the Governor. The Secretaries had direct access to the Governor and they were independent of Ministerial Control. The system could be demoralized into subservience to an irremovable executive. The successful working of the diarchy thus became impossible from the very beginning. The absence of well organized political parties in the Legislative Council, the existence of commercial differences, the financial difficulties and the consequent inability of Ministers and last, the inherent defects of the novel machinery of joint Government, made the diarchy a failure.

The introduction of diarchy created certain problems. The diarchy continued from 1921 to 1937. Muddiman Committee was appointed by the Government of India to investigate into the working of the diarchy. The report was published in 1925. Therein it was pointed out that the Finance member must be a member of the Executive Council. There was no force in the argument put forward in defense of this rule that trained men were required to fill the office. Bihar and Orissa was the only Province where there was an Indian Finance member and it was only here that expenditure on Transferred Department was not less than seventy percent.

This was no mean achievement for Bihar in the face of such stiff opposition from the Government side. On the basis of Bihar, Dr. Annie Besant proposed that the division between the Transferred and Reserved subject be reduced, and in her opinion the work of Dr. Sinha proved that the constitutional difficulties with regard to finance could be reduced to a vanishing point if the department was placed under an able Indian. Viewed in the light of constitutional difficulties of the ministers under diarchy, the credit of establishing utilitarian institutions goes to Sir Ganesh Datta Singh, whose ministry was the longest and at the same time most remarkable. As a minister he was credited with having placed on the Statute-Book a liberally-conceived Local-Self Government Act, which is one of the best enacted under Diarchic regime as it enfranchised the District and Municipal Boards by vesting in them the right to elect their own Chairman and also larger powers of administration and control.