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Partition and the division of assets between India and Pakistan


Partition brings back memories of tragedy that followed after independence on both sides of the border. The crude boundary between the 2 countries was prepared by Lord Wavell in February 1947. Later, Radcliffe was given the responsibility to chair 2 commissions which were working on the boundaries of Punjab and Bengal. The demarcation of the boundaries was done on the basis areas of Muslims and non Muslims, natural boundaries, communications, watercourses and irrigation systems. Finally, the Radcliffe line was published in 17th august 1947.

There were many side effects of partition like transfer of population, the problem of recovery of abandoned properties, and division of assets between the 2 countries.
Partition had exacerbated the problem of minorities, close to 40 million Muslims stayed back in India while 10 million Hindus remained in Pakistan. India solved its problem by declaring itself a secular state, on the other hand, Pakistan decided to become an Islamic republic.
The problem of division of assets kept India-Pak relations strained. As on 14th august 1947, India’s cash balance was 4000million out of which 1000 millions was demanded by Pakistan. India took the case to arbitral tribunal which decided that 750 million should be paid by India to Pakistan. But the problem arose when Pakistan refused to pay its debt. Infact Pakistan is yet to clear a pre-partition debt of Rs 300 crore to India, which it been carrying forward year after year in its Budget account as a “liability”.
At the time of partition it was decided that India would take the responsibility of paying foreign debts and Pakistan would pay its share to India in 3 equal installments, but Pakistan refused to pay its debt and that is where the problems began.
India on its part paid Rs 20 crores out of the 75 crores it was to pay Pakistan as its share. Rs 55 crores were held back as India Prime minister Nehru wanted Kashmir issue to be resolved first, since any money given to Pakistan would have been used for military purchases and used against India. Gandhi was against this decision and argued that this meant going back on an agreement made in earnest and not a good beginning for relations between two newborn countries. But, it made complete sense to block the payment when India was facing territorial threat.

Division of assets finally took place in 4:1 ratio, which meant that out of every 5 gold bars, 4 would remain in India and 1 would be sent to Pakistan. This was done so meticulously that there is even a record of proportional division of Rs 75 (petty cash)from a district commissioner in an inaccessible part of Nagaland.
It is said that Police Superintendent in Lahore divided everything equally between a Hindu deputy and a Muslim deputy, this included turbans, lathis, rifles etc. The last items were the instruments of the police band. which were split up too,a flute for Pakistan, a drum for India, a trumpet for Pakistan, cymbals for India and so on. The books, they say, were divided using not even an iota of common sense. Dictionaries were ripped apart with alphabets A-K sent to one country while the other country received the rest.
Pakistan agreed to reuse Indian currencies as the there was only one printing press, so notes were marked with “Government of Pakistan” stamp till it could establish its own printing press.

With Partition, also came the problem of recovery of abandoned properties. The communal riots had forced people to abandon their immovable properties in their parent countries. Non muslim refugees from Pakistan had left close to 5000million worth property in Pakistan while muslim refugees from India had left 1000 million worth property in India. Negotiations by both the countries began as early as 29th august 1947. India wanted the refugees to be given compensation for the property left behind, while Pakistan was of the opinion that the matter should be solved on case by case basis- the property should be either transferred or sold. Finally in 1954, India decided to use the evacuee property for the benefit of refugees by passing a displaced person’s act in parliament. In 1956, both the governments decided to transfer evacuee bank accounts, lockers and safe deposits.

Ref: https://defence.pk/pdf/threads/partition-and-the-division-of-assets-between-india-and-pakistan.408843/

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