The term on which a state joined the Federation were to be laid down in the Instrument of Accession. Joining the federation was compulsory for the British Provinces and chief commissioners provinces.
Under this act, the executive authority of the centre was vested in the Governor General on behalf of the Crown. The federal subjects were divided into two fold categories of "Reserved" and "Transferred" subjects. The Reserved list comprised of subjects such as administration of Defense, External affairs, ecclesiastical affairs and matters related to tribal areas. These subjects were to administered by Governor General in his discretion with the help of three counselors appointed by him. "They were not responsible to legislative".
The administration of the transferred subjects was to be done by Governor General on advice of the Council of Ministers whose number could not exceed 10. The council of ministers had to command the confidence of legislature. However, the Governor General could act on contrary to the advice of the Council of Ministers if any of his ‘special responsibilities’ was involved in such act. However, in that case {when an act involved special responsibilities}, the Governor General would work under the control and direction of the Secretary of State.
Further, the Governor General was also responsible for the coordination of work between the two wings and for encouraging joint deliberations between the counselors and the ministers.
The bicameral federal legislature would be consisted of two houses viz. Council of states and Federal Assembly.
The Council of States was to be upper house and a permanent body with one third of its membership retiring every 3rd year. It was to be composed of 260 members of which 156 were to be representatives of British India while 104 of the Indian states.
The 150 out of 156 representatives of British India were to be elected on communal basis while six were to be nominated by Governor General from amongst women, minorities and depressed classes. Further, the seats which were reserved for Hindus, Muslims and Sikhs had to be filled via direct election while those reserved for Europeans, Anglo-Indians, Indian Christians and Depressed Classes were to be filled by Indirect election.
The distribution of the seats among states was on their relative importance and not population. The representatives of the princely states would be nominated by rulers.
The Federal Assembly was the lower house with a tenure of five years. It was to be made of 375 members who which 250 representatives of British India and not more than 125 members from princely states. While the seats reserved for princely states were to be filled by nominated members, the provinces were given different numbers of seats. Election to the Federal assembly was to be indirect. The term of the assembly was five years but it could be dissolved earlier also.
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The most remarkable feature of the Act was the provincial autonomy. With the abolition of Dyarchy at provinces, the entire provincial administration was instructed to the responsible ministers who were controlled and removed by the provincial legislatures.
The provincial autonomy means two things. First, the Provincial Governments were wholly, responsible to the provincial legislatures and secondly, provinces, were free from outside control and interference in a large number of matters. Thus, in the provincial sphere, the Act of 1935 made a fundamental departure from the act of 1919.
The act divided the powers between the Centre and provinces in terms of three list-Federal List (for Centre, with 59 items), Provincial List (for Provinces, with 54 items), and Concurrent list (for both, with 36 items). Residuary powers were given to the Viceroy.
The degree of autonomy introduced at the provincial level was subject to important limitations: the provincial Governors retained important reserve powers, and the British authorities also retained a right to suspend responsible government.
A controversial feature of the Government of India Act, 1935 was the safeguards and reservations provided in the Act, would serve as checks and limitations on such undesirable tendencies which might lead to the failure of the responsible government in India. A plea was given that those safeguards and reservations were necessary for the interests of the country. They were imposed either on the exercise of powers by the Government of India on of the states.
It further extended the principle of communal electorate for depressed class (Scheduled castes) women and labour.
The Government of India Act, 1935 provided for the establishment of Federal Court to interpret the Act and adjudicate disputes relating to the federal matters. It provided that the Federal Courts should consist of one Chief justice and not more than six judges.
The Federal Court was given exclusive original jurisdiction to decide disputes between the Centre and constituent Units. The provision was made for filing of appeals from High Courts to the Federal Court and from Federal Court to the Privy Council. The Federal Court also had jurisdiction to grant Special Leave to Appeal and for such appeals a certificate of the High Court was essential.
It abolished the council of India, established by the Government of India Act of 1858. The secretary of state for India was provided with a team of advisors in its place.
The act extended the franchise. This act introduced for the first time the direct elections. About 10% of the total population got the voting rights.
The GOI act 1935 vested the control of Railway in a new authority called Federal Railway Authority, which had seven members and was free from control of ministers and councillors. The members of this authority reported directly to Governor General. The idea was to assure the British Stakeholders of the railways that their investment was safe.
The partial reorganization of the provinces included separation of Sind from Bombay, Splitting Bihar and Orissa into separate provinces, Complete separation of Burma from India, detachment of Aden from India and establishing as a separate colony.
The Government of India Act 1935 contemplated the Federation of the British Indian Provinces and Indian States. But for Burma, there was a separate set of Events. Burma was proposed to be separated in pursuance of the recommendation of the Indian Statutory (Simon Commission) whose proposal was accepted in principle by the Government. Consequently a Burma Round Table Conference was held in London in 1932. In 1935, Burma Act was passed and separation of Burma actually took place in 1937. The Government of India Act 1935 also provided a new Burma Office, in preparation for the establishment of Burma as a separate colony, but the same Secretary of State headed both Departments and was styled the Secretary of State for India and Burma. The first secretary of state for India and Burma was Lord Dundas.
The proposal for setting up of the Federation of India did not materialize because the act proposed that federation could come into existence only if as many princely states (which had been given option to join or not to join) were entitled to one half of the states seats in the upper house of the federal legislature. Due to this, Central Government in India continued to be governed by the provision of the Act of 1919(Montague-Chelmsford Reforms).However, some parts of the GOI Act 1935 came into force for example : the Federal Bank (The Reserve Bank of India) and the Federal Court were established in 1935 and 1937 respectively. The other parts of the Act, particularly provincial Autonomy, came into force on 1st April 1937. The first elections under the Act were also held in 1937.