Explanation: Before Wellesley, the Company concluded alliances with Indian princes. The Nizam and the Nawab of Oudh received subsidies for the maintenance of British contingents.

• Such forces were generally stationed outside the State concerned. Payment was made in cash. Difficulties arose when the payments were not promptly paid.
• Wellesley broadened the scope of this arrangement by his Subsidiary Alliance System, bringing under it Hyderabad, Mysore, Lucknow, the Maratha Peshwa, the Bhonsle (Kolhapur) and Sindhia (Gwalior).

Source: NCERT