As with much that Rushdie does, allegory exists on both political and personal levels. It is difficult to find where they exactly reside because both forms of allegory collapse into one another. It is through this allegory where more insight into work and author is revealed.
On one level, there is a personal allegory evoked in the novel. At the time of writing the book, Rushdie was dealing with the fatwa issued against him. The allegorical connections are evident in this context. Soraya leaves Rashid, the Shah of Blah/ The Ocean of Notions, in much the same way that Rushdie himself was abandoned by those he loved and the world, for the most part. Rashid's inability to compose his work comes from this rejection, something that Rushdie himself experienced while living under the fatwa and the marginalization that resulted from it. The idea that Haroun saves his father and repatriates him with his gift of writing is allegorical to the dedication of the book to Zafar, Rushdie's own son. There is something profound about Rushdie, himself a father who has been silenced by the fatwa, writing a book in which a storyteller's ability to recreate his art is restored by his son, the only force of good in a world of impending evil. In this light, the story operates as a personal allegory for Rushdie.
At the same time, the allegorical connections on a political level are as present. The rejection of story telling by Sengupta, and essentially Soraya, as well as in the political force of Khattum- Shud are allegorical statements against social and political authority that seek to silence artistic free speech. The fatwa helped to underscore Rushdie's unwavering commitment to liberalized notions of free speech and artistic expression. There are few better than Rushdie in the position to speak about such a condition. Rushdie's work operates an an allegorical criticism of these forces that work to silence the artist's voice in the world. The fact that Rashid was used by those in the position of power to distract the body politic is another allegorical connection to how Rushdie views the relationship between art and government. Through his depiction of the artist in the story, Rushdie makes a clear statement about how the voice of the artist should and must operate outside of the realm of the political in order to remain true to their creation and their own gift. Soraya's return and the defeat of Khattum- Shud is a validation of this. Again, one sees this in a sad allegorical light when it is contrasted with Rushdie's own life under the fatwa and the abandonment he experienced as a result of it.