History
When Britain ceded its paramountcy over British India (including the modern states of India, Pakistan and Bangladesh), a large portion of the subcontinent was held by rulers whose position and status within the British Raj varied. There were in 1947 more than 565 such princely states in India whose position and relation with the Paramount Power was determined by separate treaties. A system of Gun salutes also determined the importance of each state. On the eve of independence, most of these states had signed the Instrument of Accession with either India or Pakistan. Only certain states pressed for claims of complete independence after the British left India. However, due to the diplomacy of Vallabhbhai Patel and VP Menon, Travancore, Bhopal and Jodhpur signed the Instruments of Accession before 15 August 1947. Even after independence three states vacillated, namely Kashmir, Junagadh and Hyderabad which were integrated later.
The Instruments of Accession needed the states to only cede defense, communications and foreign relations to India. Democratic institutions were introduced in these states and it was only in 1949 that they were fully merged with India to form new states. Thus Travancore Ambliara and Cochin merged into India and formed the new state of Thiru-Kochi. Although in 1947 the royal families had been allowed to retain large sums of money as their Privy Purse, in 1949 with the states and its revenues being entirely taken over by the Government of India, it was the Indian Government that provided the rulers and their families with Privy Purses that were determined by several factors such as revenue of the state, gun salute enjoyed, antiquity of the dynasty and so on. Dewan Jarmani Dass of Kapurthala says:
| “ | Thus the rulers surrendered their sovereignty and as a quid pro quo they were granted handsome Privy Purses and other privileges | ” |
Read more about this topic: Privy Purse In India
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