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On 8 August 1940, early in the Battle of Britain, the Viceroy of India, Lord Linlithgow, made the so-called 'August Offer, a fresh proposal promising the expansion of the Executive Council to include more Indians, the establishment of an advisory war council, giving full weight to minority opinion, and the recognition of Indians' right to frame their own constitution (after the end of the war). In return, it was hoped that all parties and communities in India would cooperate in Britain's war effort.

The declaration marked an important advance over the existing state of things, as it recognised at least the natural and inherent right of the people of the country to determine the form of their future constitution, and explicitly promised dominion status. However, The Congress Working Committee meeting at Wardha on August 21, 1940 rejected this offer, and asserted its demand for complete freedom from the imperial power. Gandhi viewed it as having widened the gulf between Nationalist India and the British ruler. It was also rejected by Muslim League . The Muslim League asserted that it would not be satisfied by anything short of partition of India.

The following proposals were put in:

  • After the war a representative Indian body would be set up to frame a constitution for India.
  • Viceroy's Executive Council would be expanded without delay.
  • The minorities were assured that the government would not transfer power "to any system of government whose authority is directly denied by large and powerful elements in Indian national life."

Significant modifications were made in the August Offer in 1942 in the form of Cripps Proposals.

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