Budget-1946 that divided India and created Pak

The Harbert Baker designed high-dome majestic Indian parliament building has witnessed a budget proposal that carved India into two parts. That was February 2, 1946, and Delhi was still shivering with cold weather conditions and the mood inside the Parliament was little tense as there were fears that the Finance Minister would be very severe on business class and slap series of taxes. All these fears were expressed as the then Finance Minister was Liaquat Ali Khan, the comrade of Mohammad Ali Jinnah and himself a top Muslim League leader.

During the final phase of the British rule in India, the colonial government made only last attempt to bring together the Congress and the Muslim League under an interim government to try and avert partition. Khan was the Finance Minister of the interim Cabinet headed by Pt Nehru. It had 16 members including, Sardar Patel, Dr Rajinder Prasad and Babu Jagjivan Ram from Congress and Liaquat Ali Khan and JN Mandal, a Hindu, from Muslim League.

A scion of a feudal family of Karnal with strong connections with Western UP also, Liaquat Ali Khan imposed a 25 per cent tax on business profits over one lakh rupees, doubled corporate tax, imposed capital gains tax, and doubled export duty on tea. The budget also proposed a commission to unearth tax evaders. Socialists in Congress supported these proposals. But others like Patel were outraged, claiming Liaquat Ali Khan was really attacking Hindu businessmen (like GD Birla, Jamnalal Bajaj and Walchand) who had long financed Congress. Some say that was a communal interpretation of a budget that equally affected Muslim and Parsi industrialists. Liaquat Ali Khan had the power to block any expenditure. He constantly queried and blocked spending proposals of Congress Ministers. Sardar Patel is reported to have said that he could not even appoint a peon without Liaquat's approval, which took ages.

Hindu businessmen also feared that Liaquat would selectively target them for tax evasion via the new commission, a fear some Congressmen shared. Liaquat's tactics proved successful. Ultimately, the conduct of Liaquat Ali Khan apparently convinced Patel and Nehru that working with the Muslim League was impossible. It is also said that Nehru and Patel accepted Partition because "by conceding Pakistan to Jinnah, they would have no more of him and eliminate his nuisance value; or as Nehru put it privately, that by 'cutting the head we shall get rid of headache.'"

As mandarins of Union Finance Ministry would be busy these days giving final shape to union budget under the watchful eyes of Pranab Kumar Mukehrjee, it is still not known that how many among them would be aware of the fact the interim budget of 1946 was prepared both in North Block and at a huge mansion at Tilak Marg (then Harding Lane). That was the mansion of Khan.

It is said that Liaquat Ali Khan along with some senior civil servant with close ties with Muslim League prepared the tax proposals of that budget. Among them was AR Bogra. Bogra too went on to become the Prime Minister of Pakistan. He was only the second leader from East Pakistan to become the PM of Pakistan.

Returning to interim cabinet, it is said that even though Muslim League was keen to take up the home portfolio, at the advice of Bogra they settled for finance. Bogra convinced Jinnah and Liaquat Ali Khan that more than home, finance was a key ministry. Some say that the head of interim government, Jawaharlal Nehru, himself offered Muslim League the finance portfolio. Khan presented the interim budget on February 2, 1946, as the Finance Minister of the interim government. And he took the budget papers from his house to Parliament.

Once Pakistan became a reality, Liaquat Ali Khan left for Pakistan and his house at Tilak Marg (then Harding Lane) became the official residence of Pakistan high commissioner in Delhi. Unlike Jinnah, Khan could not sell off his house for some unknown reasons. If he sold it then, it would have fetched him close to Rs 2 lakh, the amount Jinnah got after selling his Aurangzeb Road house. In a huge mansion, Liaquat Ali Khan used to live with his pretty wife, Gul-e-rana, a teacher of English in IP college of Delhi University. Liaquat Ali Khan had huge properties in both Delhi and Karnal. In fact, he belonged to the feudal family of Karnal. It is said that before going to Pakistan, Gul-e-Rana took two months leave from her college. She told her colleagues that she would rejoin college. So, even the wife of first PM of newly created nation was not sure that Pakistan is now a reality. Once Sheela Uttam Singh, the colleague of Gul and later principal of the IP college told many years ago that she was extremely affable person and take her job extremely seriously.

Apart from being a top Muslim League leader, Liaquat was very active in the social circles of the capital. He used to organise Jinnah football tournament till 1946 at Moghal ground just close to Indian Express building. He also remained head of the managing committee of Anglo-Arabic School at Ajmeri Gate that also run Delhi College (now Zakir Hussain College) for many years. Dr Riaz Umer, ex-principal of Zakir Hussain college, says that Liaquat ali Khan was a man of letters and he actively take interest in the affairs of school. Before leaving for Pakistan, he donated some money to school.

And in Pakistan after Jinnah's death in 1948, Liaquat Ali Khan became Pakistan's Prime Minister. Liaquat was assassinated in 1951 in Rawalpindi – at the same park where Benazir Bhutto was killed in 2007. On October 16, 1951, Khan was shot twice in the chest during a public meeting of the Muslim City League at Company Bagh, Rawalpindi. The police immediately shot the assassin who was later identified as Saed Akbar Babrak. Khan was rushed to a hospital and given a blood transfusion, but he succumbed to his injuries. The exact motive behind the assassination has never been fully revealed Saad Akbar Babrak was an Afghan national and a professional assassin from Hazara. He was known to the police prior to the assassination of Liaquat Ali Khan. The assassination is still a very big question mark because it was never investigated properly.

And as we would see UP assembly elections soon, this is worthwhile to mention here that Liaquat Ali Khan used to contest election for the UP Assembly from Muzzaffarnagar and Meerut on Muslim League ticket.

(The author is a Delhi-based journalist who closely follows South Asia, business, Delhi and Indian diaspora)