Iqbal never advocated the Pakistan scheme. Here is the link of his 1930 speech to the ML session and he clearly spells out his vision of a muslim majority state within the Indian union. States that would have common defence and foreign policy. A NW state that would be an ally and defend the frontier against aggression to the mainland India. Unfortunately his vision was never fulfilled. Please go through his entire speech which is a must read if you want to understand what Iqbal was articulating for Indian muslims and what he felt about India as a whole.
Sir Muhammad Iqbal’s 1930 Presidential Address
There is no doubt that muslims as a whole were politically and economically a weaker community. But at the same time, muslims as a whole were just as poor as the majority of non muslims. The literacy rate of the whole of India was around 9% which was more or less the same as muslims as well. Infact, more muslims were represented in the British Indian army mainly from the NWFP and Punjab than non-muslims (around 55%).
Besides, we had non-muslims rulers like the Sikh kingdom in Punjab, the Dogras in Kashmir, the Marathas in central India and Tranvacore ruled by hindu kings in south India among others which were quite powerful on their own. These groups never claimed their ruler ship just on religious basis but tried their utmost to take care of all religious communities under their rule and form alliances irrespective of religion. Be it the Marathas or the Mughals.
Infact the first was of independence in 1857 was a classic example of Hindus, Sikhs and Muslims revolting against the British under a single banner of Bahadur Shah Zafar. Ironically it was a muslim minister who ended up betraying his troop positions to the British as a traitor.
So religious affinity was not a political problem as such until it was made paramount by the various events. Infact, it was only after the British census post the 1857 that the majority-minority concept was started as was the martial races theory expounded since it was mainly "loyal" soldiers from NWFP and Punjab that helped put down the revolt.
In the words of the Maulana Azad, partition was a politically incorrect solution to a political problem.
