Though the British intensified their policy of repressing the Extremists, they simultaneously also tried to pacify the Moderates through certain reforms. In AD 1909, they announced the Indian Councils Act, popularly known as the Morley-Minto Reforms. The reforms were named after Lord Morley, the Secretary of State for India and Lord Minto, the Indian Viceroy. The main features of this act were:

1. The membership of the Central Legislative Council and the Provincial Legislative Councils was enlarged. However, less than half of the members were elected members. Also, the elected members were not to be elected by the people but by the influential sections of the society such as landlords, zamindars and businessmen.

2. The system of separate electorates was introduced. The Muslims were grouped into separate constituencies form where only Muslim candidates could contest elections. This provision was made to cut-off the Muslims from the national movement by treating them as separate from the rest of the nation and to prevent Hindu-Muslim unity, something which the Congress had been trying to nurture.

No significant improvement was introduced by these reforms. The British refused the Indian demand for ‘swaraj’. The Congress opposed the creation of separate electorates for the Muslims. This system of separate electorates for the Muslims sowed the seeds of the policy of communalism.