Division of Resources: Civil Government, Finances and Defence

At a Glance

• Civil government Partition Council with a steering committee of H.M. Patel and Mohammad Ali
• Staff About 1,60,000 employees opted for transfer
• Finances Cash balances and public debt; Rs 550 million dispute
• Defence Joint Defence Council under Auchinleck; Supreme Commander’s post abolished
• Exam link UPSC Prelims, Modern History: Independence and the New-Born Nation

Where Does It Fit?

This is the third topic of the category on independence and the new-born nation. The previous topic covered the Radcliffe Award and the communal riots. This topic covers the division of the civil government, the finances and the armed forces. The next topic covers the assassination of Gandhi. Previous topic: Radcliffe Boundary Award and the Communal Riots.

How Was the Civil Government Divided?

The Indian Independence Act had provided for the division of the apparatus and personnel of the Indian Civil Service and other services. To carry out the division amicably, a Partition Council was set up under the Governor-General, with two representatives each of India and Pakistan. A steering committee consisting of H.M. Patel and Mohammad Ali helped the Council at the operational level.

All civil servants were asked to give their option about the dominion they wished to serve. Around 1,60,000 employees opted for transfer from India to Pakistan or from Pakistan to India. For members of the Indian Civil Service, a distinction was made between Europeans and Indians. Indian members were to continue in service in the country of their choice on the existing scale. European officers could continue on their existing pay, leave and pension rights, but if they wished to retire they were entitled to special compensation and early retirement. The background of the service is in Evolution of the Civil Services: Cornwallis to the Charter Act of 1853.

How Were the Finances Divided?

The division of the cash balances and the allocation of the public debt created tension between the two countries. Pakistan wanted a one-fourth share of the total cash balances. India pointed out that only a small portion of the cash balances represented the real cash needs of undivided India, and that the rest was kept as an anti-inflationary mechanism.

Ramachandra Guha writes in India After Gandhi that the Indian government withheld Pakistan’s share of the sterling balance that the British owed jointly to the two dominions, a debt incurred on account of Indian contributions to the Second World War. The amount was about Rs 550 million. The Indian government was not keen to release the money because it was angry with Pakistan for having tried to seize Kashmir by force, as in Integration of the Indian States, 1947-49. Gandhi saw this as unnecessarily spiteful. He went on a fast and made the ending of the fast conditional on the transfer of the money owed to Pakistan. He succeeded in pressing the Congress leadership to give more cash resources to Pakistan. According to some scholars, this became one of the reasons why a Hindu fanatic assassinated Gandhi, as described in Assassination of Gandhi.

A note on the figure: the sum is sometimes called a sterling balance, while many accounts describe the Rs 55 crore as Pakistan’s share of the cash balances under the financial settlement. The amount, Rs 550 million, is the same in either account.

How Were Defence Personnel and Equipment Divided?

For a smooth division of the armed forces and their plants, machinery, equipment and stores, a Joint Defence Council was set up with Auchinleck as Supreme Commander. The Council decided that Muslim-majority units should go to Pakistan and non-Muslim units to India. Because of serious differences between the two sides, the post of Supreme Commander was abolished. Amid chaos, British troops began to leave India on 17 August 1947, and the process was completed by February 1948. The pre-1947 structure of the army is in The Military Under the British. The failure of the Boundary Force is in Radcliffe Boundary Award and the Communal Riots.

What Does the Division Show?

As an analytical point, each division had its own rule. The services were divided on individual choice, the cash balances by negotiation, and the army by unit, and the second of these rules was the one that broke down into a dispute. The rules were applied in a few months, during riots and refugee movements, with British officers leaving and no time for the two new governments to build offices of their own. This is one reason why the division of resources continued to affect relations between India and Pakistan after 1947, as described in India and Pakistan, 1947-64. The same haste is the theme of Plan Balkan and the Integration Problem at Withdrawal.

Why Is This Topic Important?

• Partition Council Names of bodies and persons are Prelims facts
• Gandhi’s fast over cash balances A link between finance, Kashmir and the assassination
• Administrative consequences of partition A GS Paper 1 theme on the costs of the transfer

What Came Next?

The next topic covers the assassination of Gandhi on 30 January 1948 and the ban on the RSS. Next topic: Assassination of Gandhi.

Key People and Terms

• Partition Council The body that divided the civil government
• Steering committee H.M. Patel and Mohammad Ali
• Cash balances The reserves whose division Pakistan claimed
• Sterling balance Debt owed by Britain for India’s wartime contributions
• Joint Defence Council Body under Auchinleck that divided the armed forces
• Supreme Commander The post held by Auchinleck and later abolished

Exam Corner

Mains Angle

Questions ask about the administrative aspects of partition. These points add depth.

• Method Option for staff, negotiation for finance, unit rule for army
• Dispute The cash balance and Gandhi’s fast
• Haste Compressed timetable and British exit