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Rh Sir Salar Jung I and Nawab Shams-ul-Umara were made co-regents, the advice of the British Resident being taken on all important matters, and the Regency continued until 1884, when His Highness was invested with sovereign rights and the full enjoyment of an annual income of some ten millions of rupees derived from Sarf-i-khas (crown) lands, to say nothing of crown jewels and precious stones, that are said to be priceless.

During the reign of H. H. Nizam Mir Mahabub Ali Khan many improvements were introduced into the State, and the changes brought about by Sir Salar Jung I were further developed. In 1893 the Cabinet and Legislative Councils were formed, and in the latter Council, for the first time in the annals of Hyderabad, the non-official element was allowed a voice in the work of administration, a privilege that has not, so far, been appreciated or developed by His Highness's subjects.

Education received much encouragement, the valuable State Library was opened, the Guaranteed State Railway became a paying concern, three large spinning and weaving mills and many small ginning and