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Why Congress Accepted Dominion Status
The Congress was willing to accept dominion status despite its being against the Lahore Congress (1929) spirit because
(i) it would ensure a peaceful and quick transfer of power;
(ii) it was more important for the Congress to assume authority to check the explosive situation; and
(iii) it would allow for some much needed continuity in the bureaucracy and the army.
For Britain, the dominion status offered a chance to keep India in the Commonwealth, even if temporarily, considering the economic strength, defence potential and greater value of trade and investment in India.