In his presidential address at the Lukhnow session of Muslim League in 1930 Allama Iqbal for the first time presented the idea of two nation theory. For the benefit of the members I post the relevant excerpt.
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Communalism in its higher aspect, then, is indispensable to the formation of a harmonious whole in a country like India. The units of Indian society are not territorial as in European countries. India is a continent of human groups belonging to different races, speaking different languages, and professing different religions. Their behaviour is not at all determined by a common race-consciousness. Even the Hindus do not form a homogeneous group. The principle of European democracy cannot be applied to India without recognising the fact of communal groups. The Muslim demand for the creation of a Muslim India within India is, therefore, perfectly justified. The resolution of the All-Parties Muslim Conference at Delhi is, to my mind, wholly inspired by this noble ideal of a harmonious whole which, instead of stifling the respective individualities of its component wholes, affords them chances of fully working out the possibilities that may be latent in them. And I have no doubt that this House will emphatically endorse the Muslim demands embodied in this resolution.
Personally, I would go farther than the demands embodied in it. I would like to see the Punjab, North-West Frontier Province, Sind and Baluchistan amalgamated into a single State. Self-government within the British Empire, or without the British Empire, the formation of a consolidated North-West Indian Muslim State appears to me to be the final destiny of the Muslims, at least of North-West India. The proposal was put forward before the Nehru Committee. They rejected it on the ground that, if carried into effect, it would give a very unwieldy State. This is true in so far as the area is concerned; in point of population, the State contemplated by the proposal would be much less than some of the present Indian provinces. The exclusion of Ambala Division, and perhaps of some districts where non-Muslims predominate, will make it less extensive and more Muslim in population so that the exclusion suggested will enable this consolidated State to give a more effective protection to non-Muslim minorities within its area. The idea need not alarm the Hindus or the British. India is the greatest Muslim country in the world. The life of Islam as a cultural force in the country very largely depends on its centralisation in a specified territory. This centralisation of the most living portion of the Muslims of India, whose military and police service has, notwithstanding unfair treatment from the British, made the British rule possible in this country, will eventually solve the problem of India as well as of Asia. It will intensify their sense of responsibility and deepen their patriotic feeling.
Thus, possessing full opportunity of development within the body politic of India, the North-West Indian Muslims will prove the best defenders of India against a foreign invasion, be that invasion one of ideas or of bayonets. The Punjab with 56 percent Muslim population supplies 54 percent of the total combatant troops in the Indian Army, and if the 19,000 Gurkhas recruited from the independent State of Nepal are excluded, the Punjab contingent amounts to 62 percent of the whole Indian Army. This percentage does not take into account nearly 6,000 combatants supplied to the Indian Army by the North-West Frontier Province and Baluchistan. From this you can easily calculate the possibilities of North-West Indian Muslims in regard to the defence of India against foreign aggression. The Right Hon'ble Mr. Srinivasa Sastri thinks that the Muslim demand for the creation of autonomous Muslim states along the north-west border is actuated by a desire "to acquire means of exerting pressure in emergencies on the Government of India." I may frankly tell him that the Muslim demand is not actuated by the kind of motive he imputes to us; it is actuated by a genuine desire for free development which is practically impossible under the type of unitary government contemplated by the nationalist Hindu politicians with a view to secure permanent communal dominance in the whole of India.
Nor should the Hindus fear that the creation of autonomous Muslim states will mean the introduction of a kind of religious rule in such states. I have already indicated to you the meaning of the word religion, as applied to Islam. The truth is that Islam is not a Church. It is a State conceived as a contractual organism long before Rousseau ever thought of such a thing, and animated by an ethical ideal which regards man not as an earth-rooted creature, defined by this or that portion of the earth, but as a spiritual being understood in terms of a social mechanism, and possessing rights and duties as a living factor in that mechanism. The character of a Muslim State can be judged from what the Times of India pointed out some time ago in a leader [=front-page article] on the Indian Banking Inquiry Committee. "In ancient India," the paper points out, "the State framed laws regulating the rates of interest; but in Muslim times, although Islam clearly forbids the realisation of interest on money loaned, Indian Muslim States imposed no restrictions on such rates." I therefore demand the formation of a consolidated Muslim State in the best interests of India and Islam. For India, it means security and peace resulting from an internal balance of power; for Islam, an opportunity to rid itself of the stamp that Arabian Imperialism was forced to give it, to mobilise its law, its education, its culture, and to bring them into closer contact with its own original spirit and with the spirit of modern times.
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Three years later a Cambridge student Ch. Rahmet Ali proposed the name Pakistan for the new State. This was followed by the Lahore declaration in 1940 and in 1947 Pakistan was born.