Ceylon National Congress (CNC) was founded to agitate for greater autonomy, although the party was soon split along ethnic and caste lines.. The independence movement broke into two streams: the “constitutionalists”, who sought independence by gradual modification of the status of Ceylon and the more radical groups associated with the Colombo Youth League, Labour movement of Goonasinghe, and the Jaffna Youth Congress. These organizations raised the cry of “Swaraj” (“outright independence”) following the Indian example when Jawaharlal Nehru, Sarojini Naidu and other Indian leaders visited Ceylon in 1926. The Marxist Lanka Sama Samaja Party (LSSP), which grew out of the Youth Leagues in 1935, made the demand for outright independence a cornerstone of their policy. They also demanded the replacement of English as the official language by Sinhala and Tamil. The Marxist groups were a tiny minority and yet their movement was viewed with great interest by the British administration. But they did not take the Marxists seriously.
The Soulbury Commission was the most important result of the agitation for constitutional reform in the 1930s. The Tamil organization was by then led by G. G. Ponnambalam, who had declared himself a “proud Dravidian” and proclaimed an independent identity for the Tamils. He attacked the Sinhalese and criticized their historical chronicle known as the Mahavamsa. One such conflict in Navalapitiya led to the first Sinhalese-Tamil riot in 1939. Ponnambalam opposed universal franchise, supported the caste system, and claimed that the protection of minority rights requires that minorities (35% of the population in 1931) having an equal number of seats in parliament to that of the Sinhalese (65% of the population). This “50-50” or “balanced representation” policy became the hall mark of Tamil politics of the time. However, the Soulbury Commission rejected the submissions by Ponnambalam and even criticized what they described as their unacceptable communal character. Meanwhile, Senanayake, Baron Jayatilleke, Oliver Goonatilleke and others lobbied the Soulbury Commission without confronting them officially. The unofficial submissions contained what was to later become the draft constitution of 1944.
The close collaboration of the D. S. Senanayake government with the war-time British administration led to the support of Lord Louis Mountbatten. His dispatches and a telegram to the Colonial office supporting Independence for Ceylon have been cited by historians as having helped the Senanayake government to secure the independence of Sri Lanka. The shrewd cooperation with the British as well as diverting the needs of the war market to Ceylonese markets as a supply point, managed by Oliver Goonatilleke, also led to a very favourable fiscal situation for the newly independent government.
Sri Lanka was a front-line British base against the Japanese during World War II. Sri Lankan opposition to the war led by the Marxist organizations and the leaders of the LSSP pro-independence group were arrested by the Colonial authorities. The movement in Ceylon was minuscule, limited to the English-educated intelligentsia and trade unions, mainly in the urban centres. In contrast to this “heroic” but ineffective approach to the war, the Senanayake government took advantage to further its rapport with the British commanding elite. Ceylon became crucial to the British Empire in the war, with Lord Louis Mountbatten using Colombo as his headquarters for the Eastern Theater. Oliver Goonatilleka successfully exploited the markets for the country’s rubber and other agricultural products to replenish the treasury. Nonetheless, the Sinhalese continued to push for independence and the Sinhalese sovereignty, using the opportunities offered by the war, pushed to establish a special relationship with Britain.
The constitutionalists led by D. S. Senanayake succeeded in winning independence. The Soulbury Constitution was essentially what Senanayake’s board of ministers had drafted in 1944. The promise of Dominion status and independence itself had been given by the Colonial Office. On the 4th of February 1948, the Duke of Gloucester came to Ceylon of declare the independence officially and ceremonially by lowering the Union Jack.