At the tail end of the Mughal rule and the inception of British power around 1765, Dhaka began to decline in importance and contract in size. The city experienced disastrous famines, floods and fires. Calcutta was growing in importance and it was difficult for Dhaka to compete with Calcutta, which as the Capital of British India enjoyed the patronage of the rulers.

The fate of Dhaka was determined as a declining urban centre under the control of the East India Company after the decisive battle of Plassey in 1757. During that time (1757-1864), being an old centre of trade, Dhaka witnessed a tremendous decrease in population and its area. The population of Dhaka which was estimated to be nearly two lakh in 1800 (Taylor, 1840) dropped to about 67000 in 1873 (Allen, 1912) and 51,000 in 1873 (Hunter, 1875), in 1830, the energetic collector of Dhaka, Mr. Walters, founded the Dhaka Committee under his chairmanship for the development of Dhaka town. The inclusion of Ramna Green Pasture, area from Old Paltan to Nimtoli, Dakesshwari Tample to Azimpur under the town’s jurisdiction was done in this period. The total urban area during that time rose to a total of 14.5 sq. km and the total population was about 200,000 in 1800 and 51,635 in 1867 (Census of Bengal, 1901). The urbanized space started to encroach towards north on the Pleistocene terrace high lands during this time mainly for residential and recreational purposes (i.e., Ramna, Paribagh and Shahbagh areas).