Lord Lytton was an experienced diplomat and a man of striking ability and brilliance. The British Prime Minister, Disraeli appointed him as the Viceroy of India. The prevailing famine and the political disturbances in the North West Frontier caused a great worry to the British at that time.
The famine of 1876-78 had resulted from the failure of two monsoons. It covered an area of two lakh fifty thousand square miles and affected fifty eight million people. The worst affected areas were Madras, Mysore, Hyderabad, Bombay, Central India and the Punjab. It took a toll of five million lives in a single year. The outbreak of cholera and fever added to the misery of the suffering population. Lytton's Government failed miserably to tackle the situation. The government's relief measures seemed to be inadequate. The first Famine Commission (1878-80) under Sir Richard Strachey was appointed and it made many commendable recommendations. They include provision of funds for famine relief and construction work in the annual budget. The Famine Code came into existence in 1883.
In 1878, the Vernacular Press Act was passed. This Act empowered a Magistrate to secure an undertaking from the editor, publisher and printer of a vernacular newspaper that nothing would be published against the English Government. The equipment of the press could be seized if the offence was committed. This Act crushed the freedom of the Indian press. This created adverse public opinion against the British Government. In the same year, the Arms Act was passed. This Act prevented the Indians to keep arms without appropriate license. Its violation would be a criminal offence. The Europeans and the Anglo- Indians were exempted from the operation of these legislations.
Lord Lytton introduced uniform salt tax throughout British India. He also abolished many import duties and supported the Free Trade Policy. This had seriously affected the Indian economic interest. The system of decentralisation of finance that had begun in the time of Lord Mayo was continued during the time of Lord Lytton. The provincial governments were empowered with some control over the expenditure of all provincial matters like land-revenue, excise, stamps, law and justice. Lytton wanted to encourage the provinces in collecting the revenue and thereby strengthen the financial power and position of the provinces. In 1878, the Statutory Civil Service was established exclusively for Indians but this was abolished later.
The Afghan policy of the British was based on the assumed threat of Russian invasion of India. The first Afghan War (1838-42) proved to be a disastrous one for the British in India. When Lord Lytton was appointed the Viceroy of India, he was instructed by the home government to follow a forward policy. The Russian attempt to send a mission to Afghanistan was the main cause of the Second Afghan War.
Soon after the outbreak of the war in 1878, the British troops captured the territory between Kabul and Kandahar. The ruler of Afghanistan, Sher Ali fled from his country and died in 1879. His son Yakub Khan became the ruler and the British concluded theTreaty of Gandamak with him. A British Resident was sent to Kabul but soon he was murdered along with other British officers by the Afghan rebels. Although the British troops were able to recapture Kabul, the difficulties in holding it increased due to the activities of the rebels. Suddenly in 1780, Lytton was forced to resign by the new government in England.
Lytton's Afghan policy was severely crticised because he was responsible for the murder of the British officers including the Resident in Kabul. During his administration, millions died due to famine. The Vernacular Press Act undermined his credit.