The Congress Socialist Party of India was established in the year 1934 as a socialist committee within the Indian National Congress Party. The members of the party usually rejected the anti-rational mysticism of Mahatma Gandhi and the sectarian approach of the Communist Party of India towards the Indian National Congress. The Congress Socialist Party of India was influenced by the ideologies of Marxism-Leninism and Fabianism. The party included supporters of armed Indian freedom struggle, namely Basawon Singh and Jai Prakash Narayan; well as other members who were followers of ahimsa or nonviolent resistance, like Acharya Narendra Deva. The Congress Socialist Party promoted decentralized socialism and believed that trade unions, co-operatives, local authorities and independent farmers should possess a considerable share of the economic power. As the members of the Congress Socialist Party of India were secularists, they expected to rise above communal divisions through class solidarity.

Few members like Basawon Singh and Narendra Deva promoted a democratic socialism that was different from both reformist social democracy and Marxism. During the period of the Popular Front, the communists worked within Congress Socialist Party.

History of Congress Socialist Party of India
Basawon Singh and Yogendra Shukla were amongst the founding members of Congress Socialist Party from Bihar. Jai Prakash Narayan (Jayaprakash Narayan) and Minoo Masani (Minocher Rustom Masani) were released from prison in April 1934. Narayan organized a meeting on May 17, 1934 in Patna and as a result of the meeting the Bihar Congress Socialist Party was established. J.P. Narayan was appointed as the General Secretary and Acharya Narendra Deva served as the President of the party. After the Patna meeting, a socialist conference was held in connection to the Congress Annual Conference. The conference was held in October 1934 in Bombay (now Mumbai) and the All India Congress Socialist Party was established. Jai Prakash Narayan served general secretary and Masani was appointed as joint secretary of the party. Masani managed the party in Bombay (now Mumbai), while Puroshottam Trikamdas and Kamaladevi Chattopadhyaya mobilised the party in other regions of the state of Maharashtra. Ganga Sharan Singh, who was one of the major leaders of the Indian National Congress, was also among the founders of the Congress Socialist Party of India.

Constitution of Congress Socialist Party of India
The constitution of the Congress Socialist Party of India stated that the members of the party were also the members of the Provisional Congress Socialist Parties and it was necessary for all to be members of the Indian National Congress. Those members of political organizations or communal organizations were banned from the Congress Socialist Party membership whose objectives were contrary to the goals of the Congress Socialist Party of India. The conference held at Bombay elevated the slogan of mobilising the general populace for a Constituent Assembly.

Development of Congress Socialist Party of India
In the year 1936 the Communists became a part of the Congress Socialist Party of India and in few states like Orissa and Kerala, the communists began to dominate the party. The party commenced fraternal associations with the Lanka Sama Samaja Party of Sri Lanka in 1936. The party adopted the ideologies of Marxism in the year 1936 after the third conference in Faizpur, the members of the party aimed to change the Indian National Congress Party into an anti-imperialist front. Later in the year 1938, the Marxist sector of the Anushilan movement also joined Congress Socialist Party. As a result of this, the Anushilan Samiti also became a part of the organisation. Eventually the members of the Hindustan Socialist Republican Association joined the Congress Socialist Party of India. This faction was under the leadership of Jogesh Chandra Chatterjee.

Later various differences related to the ideological views and political practice of the party emerged between the Anushilan Marxists and the members of the party. This disparity in views surfaced at the annual session of the Indian National Congress in the year 1939, held at Tripuri. Jogesh Chandra Chatterjee also renounced his membership in the party as a protest against the various actions undertaken by the eminent leaders of the Congress Socialist Party of India. Later the Anushlian marxists left the party and eventually established the Revolutionary Socialist Party.

In the year 1940, the National Executive of the Congress Socialist Party gathered at Ramgarh and took the decision to expel all communist members from the party. The different members of the Congress Socialist Party of India actively participated in the Quit India movement, also known as Bharat Choro Andolan, under the leadership of Mahatma Gandhi, in August 1942. Jawaharlal Nehru refrained from becoming a member of the Congress Socialist Party, even though he was a socialist himself.

Decline of Congress Socialist Party of India
After the nation achieved independence from the supremacy of the British Government of India, the Congress Socialist Party of India detached itself from the Indian National Congress Party under the guidance of Jai Prakash Narayan (Jayaprakash Narayan) and Basawon Singh (Basawon Sinha), in order to establish the Socialist Party of India. Basawon Singh later become the first leader of opposition in the Indian state of Bihar and assembly; and Acharya Narendra Deva went on to become the first leader of opposition in the state of Uttar Pradesh and assembly.