Nizam Osman Ali Khan was the seventh in the line of Nizams, a lineage stretching back to the eighteenth century. He is particularly renowned for being phenomenally wealthy, in fact being among the richest men in the world at a certain point in time. It was under his reign that Hyderabad became a hotbed of contestation between the newly independent India and Pakistan.
Before peeking into the Nizam's career, we must place it in historical context. The princely state of Hyderabad consisted of large parts of the Deccan, which until the 17th century, was under the controls of the Mughals. In 1724, Mir Qamaruddin 'Chin Kilich' Khan became virtually independent of Delhi, though retaining a nominal allegiance to the Mughals. After a protracted struggle with the Marathas, the Nizam managed to consolidate his territory by the end of the 18th century. The Nizam surrendered paramountcy to the British, but held considerable leverage over his princely state. To understand the uniqueness of Hyderabad as a princely state, one has to study its demographics. Roughly 85% of the population were Hindus but the head of the state was a devout Muslim. Thus, the Nizam ensured that a sizable number of administrative portfolios were assigned to Muslims, and thus the majority community had to submit to a buoyant minority. While such an arrangement was a truism in medieval times, by the 19th century, with freedom, democracy and rights being buzz-words, challenges were bound to arise.
Nizam's personality and reign
Nizam Osman Ali Khan succeeded to his 'gaddi' on 29 August 1911. He was the 7th descendant of the Asaf Jahi dynasty. He was by all definitions a despot, not leaving a shadow of doubt about who held sway in the state. While there was an Executive Council (almost entirely consisting of Muslims), they had to submit to the decision of the Nizam. In fact, for his first five regnal years, the Nizam didn't have any ministers at all.[ref]
Lust for wealth
Another staggering facet to the Nizam's personality was his unbridled lust for wealth. He heavily taxed his population, and estimates suggest that he earned about 50 lakh rupees simply through nazarana. Over and above the taxation as a head of state, he also owned tons of properties, the most prominent one being his private estate or the serf-e-khas. His earnings here exceeded a crore. He hoarded wealth without any restraint. After the king of Japan, the Nizam was considered to be the richest man in the world.
Centralisation and communal faultlines
Having reserved all the power for himself, the Nizam did not grant any sovereignty to municipal authorities, whose presence was negligible in the Hyderabad State. Any opposition to the state was deemed illegal, and this strict enactment of sedition laws heightened tensions in the 1930s.
But, the most glaring reality of the Hyderabad state leading up to India's independence was the sharpening communal divide between Hindus and Muslims, that was largely driven by the state-sponsored promotion of radical Islam. The Hindu Mahasabha led a movement in 1938 against all the oppressive actions of the state, especially to challenge the subordination of Hindus. Amidst all the communal tensions, the British stood as a mute spectator, in a state of 'reserved neutrality'. They hardly interfered with the Nizam's administrative calls, as long he fulfilled his commitment of honouring the British Resident.
Nizam and Hyderabad's accession to the Indian Union:
Hyderabad was the second largest princely state in India, and its location in South India was particularly strategic. With the Central Provinces, Bombay State and Madras State on the North, West and East respectively, the region was almost like a strand connecting all these South Indian regions together. However, as independence drew nearer, the fortunes of Nizam's Hyderabad hung by a thread. On 3 June 1947, the Nizam issued a farman stating unequivocally that he would not send representatives to the Constituent Assemblies of Pakistan or India. He staked his claim for an independent Hyderabad state, a proposition that threatened the very existence of a unified Indian state. This was also the time when a militant group called the Razakars- under the leadership of the impulsive Qasim Rizvi- took matters in their hands and unleashed communal violence in Hyderabad. For almost a year, the state of Hyderabad was convulsed in disorder and communal unrest. Parallelly, the Nizam corresponded with Lord Mountbatten and through a lawyer named Walter Moncton put forth his case for an independent Hyderabad state. The negotiations included Sardar Patel and VP Menon, who were busy integrating many other intransigent princely states into India. Sardar Patel had made his position on Hyderabad clear by castigating its alleged independence as 'cancer in the belly of India'.[ref]
On 29 November 1947, a Standstill Agreement was signed, but it was only on 17 September 1948, that the state of Hyderabad completely acceded to India. This was due to the efforts of the Indian armed forces and the diplomatic prowess of Patel and Menon.[ref]