Midnight's Children is an allegory of India. The central character in the novel is Saleem Sinai, whose life proceeds parallelly with India's history after independence. The story is based on the idea that some people born close to the midnight of August 14, 1947 (India's independence day) are endowed with some special magical powers (If you are surprised that this could be an idea for a novel that seeks to potray a person's voyage through India's history, do not be put off. These are fairly common in Rushdie's novels. The technical term given to such flights of imagination which still retain a strong connection to something very real and happening is magical realism).
It ran into some controversy because of its open criticism of Indira Gandhi, India's Prime Minister and the 'Emergency' that she imposed on India.
External Resources
wikipedia.org dumped 2003-03-17 with terodump