In 1918, Edwin Montague, the secretary of State, and Lord Chelmsford, the Viceroy, produced their scheme of constitutional reforms which led to the enactment of the Government of India Act of 1919.
The Provincial Legislative Councils were enlarged and the majority of ‘their members were to be elected. The provincial governments were given more powers under the system of Dyarachy.
Under this system some subjects, such as finance and law and order, were called ‘reserved’ subjects and remained under the direct control of the Governor; others such as education, public health, and local self-government, were called ‘transferred’ subjects and were to be controlled by ministers responsible to the legislature.
This also meant that while some of the spending departments were transferred, the Governor retained complete Control over the financiers. The Governor could, moreover, overrule the ministers on any grounds that he considered special. At the centre, there were to be two houses of legislature.
The lower house, the Legislative Assembly, was to have 41 nominated members in a total strength of 144. The upper house, the council of State, was to have 26 nominated and 34 elected members. The legislature had virtually no control over the Governor-General and his Executive Council.
On the other hand, the Central Government had unrestricted Control over the provincial governments. Moreover the right to vote was severely restricted.
Indian nationalists had, however, advanced for beyond such halting concessions. They were no longer willing to be satisfied with the shadow of political power. The Indian National Congress met in a special session at Bombay in August 1918 under the President ship of Hasan Imam to consider the reform proposals.
It condemned then as ‘disappointed and unsatisfactory’ and demanded effective self- government instead. Some of the veteran Congress leaders led by Surendranath Banerjee were in favour of accepting the government proposals. They left the Congress at this time and founded the Indian Liberal Federation. They came to be known as Liberals and played a minor role in Indian politics hereafter.