The major development after 1937 was the spread of national movement to the princely states.

Appalling economic, political and social conditions prevailed in most of them. Peasants were oppressed, land revenue and taxation were excessive and unbearable, education war retarded, health and other social services were extremely backward, and freedom of the Press and other Civil rights hardly existed.

The bulk of the state revenues were spent on the luxuries of the princes. In several states serfdom, slavery, and forced labour flourished. Throughout history, a corrupt and decadent ruler was checked to some extent by the challenge of internal revolt or external aggression. British rule freed the princes of both these dangers, and they felt free to indulge in gross misgovernment.

Moreover, the British authorities began to use the princes to prevent the growth of national unity and to counter the rising national movement. The princes in turn depended for their self-preservation from popular revolt on the protection by the British power and adopted a hostile attitude to the national movement.

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In 1921, the chamber of Princes was created to enable the princes to meet and discuss under British guidance matters of common interest. In the Government of India Act of 1935, the proposed federal structure was so planned as to check the forces of nationalism. It was provided that the princes would get two-fifth of the seats in the Upper House and one- third of the seats in the Lower House.

People of many of the princely states now began to organise movements for democratic rights and popular governments. The All-India states People’s Conference had already been founded in December 1927 to coordinate political activities in the different states. The Civil Disobedience Movement produced a deep impact on the minds of the people of these states and stirred them into political activity.

Popular struggles were waged in many of the states, particularly in Rajkot, Jaipur, Kashmir, Hyderabad and Travancore. The princes met these struggles with violent repression. Some of them also took recourse to communalism. The Nizam of Hyderabad declared that the popular agitation was anti-Mulsim; the Maharaja of Kashmir branded it as anti-Hindu; while the Maharaja of Travancore claimed that Christians were behind the popular agitation.

The National Congress supported the States People’s struggle and urged the princes to introduce democratic representative government and to grant fundamental civil rights. In 1938, when the Congress defined its goal of independence it included the independence of the princely states. Next year, at the Tripuri session, it decided to take a more active part in the States People’s movements.

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As if to emphasise the common national aims of the political struggles in British India and in the states, Jawaharal Nehru became the President of the All-India States People’s Conference in 1939. The States People’s movement awakened national consciousness among the people of the states. It also spread a new consciousness of unity all over India.