Indian Councils Act 1892 was the beginning of the parliamentary System in India. Before this act was passed, the Indian National Congress had adopted some resolutions in its sessions in 1885 and 1889.

The first session of the Indian national Congress was organized by A O Hume and other leaders. The 4 demands put by the INC were:

1) A simultaneous examination of ICS to be held in England and India

2) Reforms of the legislative council and adoption of the principle of election in place of nomination

3) Opposition to the annexation of Upper Burma

4) Reduction in the Military expenditure.

The second demand mentioned above reflected the dissatisfaction of the Indian National Congress over the existing system of governance. The Indian leaders wanted admission of a considerable number of the elected members. They also wanted the creation of similar councils of North western Province and Oudh and also for Punjab. The Indian leaders also wanted a right to discussion on budget matters.

The demand was taken seriously by Viceroy Lord Dufferin who set a committee. The committee was given the responsibility to draw a plan for the enlargement of the provincial councils and enhancement of their status. The plan was drawn, but when it was referred to the Secretary of State for India, he did not agree to introduction of the Principle of election.

Act gave the members right to ask questions on Budget or matters of public Interest. But none of them was given right to ask supplementary questions.

The act can be said to be a First step towards the beginning of the parliamentary system in India, where the members are authorized to ask questions.

At least, they were enabled to indulge in a criticism of the Financial Policy of the Government.

It can also be said to introduce the principle of representation. This act authorized the universities, District Boards, Municipalities, Zamindars and Chambers of Commerce to send members to Provincial councils.

It increased the number of the additional members in case of the council of the governor general to maximum of 16. In case of Bombay and Madras 8-20 and In case of the Bengal 20 and In case of North Western province and oudh 15.