Establishment of the Double Government System

Both statements are fundamentally reversed. The first statement is false because the Board of Control was created to manage political and military affairs, not commercial ones. The second statement is false because the Court of Directors was restricted to managing only commercial affairs, while the Board of Control was empowered to supervise the civil and military government.

The Assertion is true; the Act created the famous 'double government' system. Reason 1 correctly identifies that the Court of Directors was limited to commercial/mercantile operations. Reason 2 is flawed because the Board of Control was not created for commercial financial auditing, but rather to oversee political, civil, and military affairs.

The second route is correct. Pitt's India Act segregated duties: the newly established Board of Control was given supreme authority over political, civil, and military affairs (hence, troop deployment). The Court of Directors retained authority exclusively over commercial affairs (hence, spice exports).

Neither assertion is valid. The first is incorrect because the Board of Control managed political affairs, not commercial trade. The second is incorrect because supervision of civil and military governance was given to the Board of Control, leaving the Court of Directors with only commercial responsibilities.