After organizing three Round Table Conferences, the government enacted the Government of India Act 1935 and held general elections to constitute legislative assemblies in the central and British Indian provinces. The Congress also decided to contest the elections to the Legislative Assemblies and formed a parliamentary sub-committee under the chairmanship of Vallabhbhai. Dr. Rajendra Prasad and Maulana Abul Kalam Azad were made its members.
Sardar Patel was given the responsibility of deciding the names of the candidates for the upcoming elections. Sardar Patel set some criteria and selected the candidates accordingly. Many of those who considered themselves close to Patel did not get tickets. Because of this, they got angry with Patel. When some Congressmen called him Hitler, Patel only replied that tickets have been given to those who were eligible according to the prescribed criteria.
In this way Sardar Patel formulated the guiding principles for India on the basis of which tickets for Lok Sabha, Rajya Sabha and Legislative Assemblies should be given by political parties. Congress got a clear majority in the Central Legislative Assembly. In the provincial assembly elections held in February 1937, the Congress got a clear majority in six provinces - Madras, Bombay, Bihar, Orissa, United Provinces and Central Provinces. Congress remained the largest party in three provinces- Bengal, Assam and North-West Frontier Province.
Congress got very few seats in two provinces- Punjab and Sindh. Sardar Patel was of the view that in the provinces where the Congress had got a clear majority, it should form the government and the party should not hesitate to assume this responsibility. Many leaders like Madan Mohan Malviya etc. strongly opposed the idea of Sardar Patel. He said that the Governor General should assure that the governors of the provinces will not interfere in the work of the ministers, then the Congress should form the government, otherwise sit in the opposition. Governor General Lord Linlithgow refused to give such assurance. Gandhiji could not take any decision and eventually the Congress refused to form the government.
On this other parties were invited to form provincial governments and minority governments were formed in all the provinces. Because of this no work could be done in the provinces. On June 21, 1937, on the assurance of cooperation by the Governor-General, on July 7, 1937, the Congress formed its cabinets in the majority provinces.
The following year the Congress, with the help of other parties, also formed its own ministries in Assam and the North-West Frontier Province. The Congress did not compromise with the Muslim League in any province. Non-Congress ministries were formed in Bengal, Punjab and Sindh. The provincial cabinet continued to function smoothly till AD 1939.