The interim government of 1946-47 included Congress and the Muslim League. Jinnah quarrelled daily with Congress on issue after issue to deny it legitimacy.
Liaquat Ali of the Muslim League was finance minister in the interim government, and had the power to block any expenditure. He constantly queried and blocked spending proposals of Congress ministers. Patel said he could not even appoint a chaprasi without Liaquat’s approval, which took ages.
In February 1947, Liaquat presented a socialist ‘‘poor man’s budget’’. This imposed a 25% tax on business profits over one lakh rupees, doubled the corporate tax, imposed capital gains tax, and doubled the export duty on tea. It also proposed a commission to unearth tax-evaders. (via Jaswant pays price for telling the truth: Swaminomics: S A Aiyar's blog-The Times Of India).
Three propaganda machines
This interesting anecdote reveals how propaganda machines of the Congress, the Indian Muslim League (IML) and the British Raj were working. Congress demonized the IML in the eyes of (current day) Indians. The IML used "Muslims were the rulers of India" propaganda plank to downgrade Congress legitamacy amongst the Muslims. The British 'demonstrated' to the whole world, that Indians would be at each others throats, without the Raj.
All three succeeded
IML wanted to show that the 'partnership' with Congress would not work. IML was not worried or interested about the future of the fragile concept of Pakistan, which the British were underwriting. Soon enough, IML gave way to a military dictatorship in Pakistan.
Congress wanted to show obstructive the IML was. The agenda of Liaquat Ali Khan was officially embraced by Nehru with great vigour and fanfare after the 1956 election. The British of course wanted that these two parties should 'realize' that they cannot live and work together.
All three succeeded. The only one who failed and suffered were the people of India!
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