The Indian Councils Act of 1861 established representative Government in India on the model of the Government prevalent in England. The Act was passed by British Parliament on 1st August 1861 to make substantial changes in the composition of the Governor General`s council for executive and legislative purposes. The most significant feature of this Act was the association of Indians with the legislation work. By the Act of 1861, it was declared that in the colonial Representative Assemblies there would be the discussions on the financial matters and taxation.

Formation of The Indian Councils Act of 1861
The Act for the better Government of India in the year 1858 led to the introduction of several significant changes in the Home Government. But these changes had nothing to do with the administrative set up of India. There was a strong feeling that there were sweeping changes in the Constitution of India after the great crisis of 1857-58. Apart from these there were several others reasons, which necessitated the changes of the Constitution of India. The Charter Act of 1833 had centralized the legislative procedures. The Legislative council (Center) had the sole authority to legislate and passing decrees and implementing them for whole of the Country. The workings of the Legislative Council set up by the Charter Acts of 1833, were not fulfilled properly. The council had become a sort of debating society or a Parliament on a small scale. It had claimed all the functions and privileges of the representative body. Trying to act as an independent legislature, it did not work properly with the Home Government. In such circumstances, after an exchange of views between the Home Government and the Government of India, the first Council Act was passed in 1861.

Authorities of The Indian Councils Act of 1861
The Act empowered the Governor-General to make rules for more convenient transactions of business in the Council. This power was used by Lord Canning to introduce the portfolio system in the Government of India. Up to that time theoretically it was the rule that the Government of India was the Government by entire body of the executive council. As a result all the official papers had to be brought to the notice of the members of the council. By the provisions declared by the Council Act of 1861, Canning divided the Government between the members of the Council. In this way the foundations of the Cabinet Government in India were established. It had been declared through this Act that each branch of administration had its spokesman and head in the Government, who was responsible for its administration and defence. Under the new system the daily matters of administration were placed by the member-in-charge. In cases of important matters, the member concerned presented the matters before the Governor General and decided in consultation with him. The decentralization of business undoubtedly made for efficiency but it was not achieved however.

The Indian Councils Act of 1861 also introduced reforms in the legislative purpose. For the convenience of legislation, the viceroy`s executive council was expanded by the addition of members. It was declared that the additional members should not be less than 6 and not more than 12. These members were directly nominated by the Governor General, who held their office for tenure of 2 years. It was made obligatory that not less than half of the members were the non-official member. The Council Act of 1861 made no statutory provisions for the admissions of the Indians. However in actuality some of the non-official seats were offered to the natives of high rank. The functions of the Legislative council were declared strictly to be confined only with the legislative affairs. It would have no control over the administration, finance or the right of interpellation.

The Indian Councils Act of 1861 restored the legislative powers of making and amending laws to the provinces of Madras (Chennai) and Bombay (Mumbai). However, no laws passed by the provincial councils were to be valid until those receive the assent of the Governor General. Further in certain matters, the prior approval of the Governor General was made obligatory. Following the provisions declared by the Councils Act of 1861, legislative council was established in Bengal, the North Western Provinces and Punjab in the years 1862, 1886 and 1889. Moreover, the Governor General was empowered by the Acts of 1861, to issue without the concurrence of the Legislative Council, ordinances, which were not to remain in force for more than 6 months.

Significance of The Indian Councils Act of 1861
The significance of the Indian Councils Act of 1861 lies in the fact that it laid down the gradual construction and consolidation of the mechanical framework of the Government. The Indian Councils Act of 1861was institutionalized to serve the necessities of co-operation of Indians in the administration of the country. Due to this Act, three separate presidencies were brought into a common system. The legislative and the administrative authority of the Governor-General-in-Council was asserted over all the provinces and extended to all the inhabitants. By this act the local needs and the growth of the local knowledge were emphasized.

The Act of 1861 vested the legislative authority in the Governments of Bombay and Madras. It also laid the provision for the creation of similar legislative council in other provinces too. As a result it laid the foundation of legislative devolution culminating in the grants of autonomy to the provinces by the Government of India Act, 1935. However it should be noted that by the Council Act of 1861, no attempts were made to demarcate the jurisdiction of the Central and the Local Legislature as in the federal constitution.

The character of the Legislative Councils established by the Act of 1861was not fulfilled properly. The legislative Councils could not function like the true legislatures neither in the composition nor in the function. Thus, the Indian Council Act of 1861 led widespread public disaffection and agitation.