After the Third Round Table Conference, the Government of India Act of 1935 passed.
The Act provided for the establishment of an All India Federation and a new system of government for the provinces on the basis of provincial autonomy.
The federation was to be based on a union of the provinces of British India and the Princely States.
There would be a bicameral federal legislature in which the States were given disproportionate weightage.
The representatives of the States were not to be elected by the people, but appointed directly by the rulers.
Only 14 per cent of the total population in British India was given the right to vote. Even this legislature, in which the Princes were once again to be used to check and counter the nationalist elements, was denied the real power.
Defence and foreign affairs remained outside the legislature’s control, while the Governor-General retained special control over the other subjects.
The Governor-General and the Governors were to be appointed by the British Government and were responsible for the governance.
In the provinces, local power was increased. The ministers responsible to the provincial assemblies were to control all departments of provincial administration. But the Governors were given special powers. They could veto legislative action and legislate on their own.
Moreover, the government retained full control over the civil service and the police.
The Act could not satisfy the nationalist aspiration for both political and economic power continued to be concentrated in the hands of the British Government.
Foreign rule was to continue as before, only a few popularly elected ministers were to be added to the structure of British administration in India.
The Congress condemned the Act as "totally disappointing."
The federal part of the Act was never introduced, but the provincial part was soon put into operation.
Though bitterly opposed to the Act, the Congress contested the elections under the new Act of 1935.
The elections conclusively demonstrated that a large majority of Indian people supported the Congress, which swept the polls in most of the provinces.
Congress ministries were formed in July 1937 in seven out of eleven provinces. Later, Congress formed coalition governments in two others. Only Bengal and the Punjab had non-Congress ministries.
The important features of Congress Ministries after 1937 election were −
The Congress ministers reduced their own salaries drastically to Rs. 500 per month;
Most of them travelled in the second or third class railway compartments;
They set up new standards of honesty and public service;
They paid greater attention to primary, technical, and higher education and public health;
They helped the peasant by passing anti-usury and tenancy legislation;
They promoted civil liberties. Political prisoners were released;
There was "relaxation of police and secret service raj;"
Freedom of the press was enhanced; and
Trade unions felt freer and were able to win wage increases for workers.
The period between 1935 and 1939 witnessed several other important political developments which, in a way, marked a new turn in the nationalist movement and the Congress.