Indira Gandhi, 1966-77: Political Developments and Socio-Economic Policies

At a Glance

• Prime Minister from 19 January 1966
• Bank nationalisation Fourteen banks, July 1969
• Emergency 25-26 June 1975 to 21 March 1977
• 42nd Amendment 1976; the mini Constitution
• Exam link UPSC Prelims, Modern History: India After Nehru

Where Does It Fit?

This is the second topic of the category on India after Nehru. The previous topic covered Shastri and the 1965 war. This topic covers Indira Gandhi’s first phase from 1966 to 1977, in its political developments and economic policies. The next topic covers the war of 1971. Previous topic: The Lal Bahadur Shastri Years and the Indo-Pak War of 1965.

How Did Indira Gandhi Come to Power and What Happened in 1967?

After Shastri’s sudden death in January 1966, Gulzarilal Nanda was again interim Prime Minister. Morarji Desai contested, but the Syndicate supported Indira Gandhi, as did most party members, partly because senior leaders thought her weak enough to be manipulated; time proved them wrong. Indira Priyadarshini was born in Allahabad on 19 November 1917, led the Vanar Sena as a child, joined the Congress in 1936, married Feroze Gandhi in 1942, took part in Quit India, served as party president in 1959, and became information minister under Shastri. She became Prime Minister on 19 January 1966, the first woman to hold the post.

The elections of 1967 came amid stagnation, a food crisis, rising prices and unemployment, and criticism of the devaluation of the rupee. The Congress won with only a thin majority in the Lok Sabha, with Morarji Desai as deputy Prime Minister and finance minister, and it lost power or a majority in several states, where coalition governments led to instability and defections. The preceding topic describes the war and the devaluation context in The Lal Bahadur Shastri Years and the Indo-Pak War of 1965.

Why Did the Congress Split in 1969 and How Did She Win in 1971?

The party had been accommodative of diverse interests, but now an ideological divide grew between right and left. The Congress right wanted to deal firmly with protest movements, give the private sector more space and improve relations with the United States. Indira Gandhi favoured radical economic change. A ten-point programme adopted by the Congress Working Committee called for social control of banks, state takeover of foreign trade, nationalisation of general insurance, ceilings on property, public distribution of food grains, faster land reform and housing plots for the rural poor. She decided to nationalise banks without consulting her finance minister, and Morarji Desai was forced to resign.

The death of President Zakir Hussain in May 1969 brought matters to a head. The official candidate was Neelam Sanjiva Reddy of the Syndicate, but Indira Gandhi supported V.V. Giri, who stood as an independent and won in August 1969. In November the party president S. Nijalingappa expelled her for indiscipline. She won over most members and formed the Congress (R), for Requisitionists, while the other group became the Congress (O), for Organisation. She lost her majority but kept power with issue-based support from the DMK, the Akali Dal and the two communist parties. Her attempts at progressive legislation were obstructed by the courts and Parliament: bank nationalisation was done through an ordinance after the legal gaps the court had pointed out were removed, and the presidential order derecognising the princes was struck down by the Supreme Court. In December 1970 she recommended dissolution of the Lok Sabha.

In 1971 the Congress (R) fought under the slogan Garibi Hatao, remove poverty, against a Grand Alliance of Swatantra, Congress (O) and the SSP, whose cry was Indira Hatao. The Congress (R) won with a good majority. It was the fifth general election and the first held separately from state elections. The victory in the war of December 1971, in Indo-Pak War of 1971 and the Birth of Bangladesh, raised her standing, and the Congress (R) won many states in March 1972. The Swatantra Party and Congress (O) were reduced to minor players. The Congress was thereafter called Congress (I), then simply the Congress, and inner-party democracy eroded.

What Were the Main Economic Policies?

The preceding seeds of the Green Revolution are in The Lal Bahadur Shastri Years and the Indo-Pak War of 1965. By the end of the 1960s the process of liberalisation had been reversed and policies could be called protectionist, and some measures weakened the economy in the long term, though in the short term they kept India clear of a debt crisis. As an analytical point, the 1969-71 measures served two purposes: the ideology of the left of the Congress, and the building of a base for Indira Gandhi against the Syndicate, a point P.N. Haksar is reported to have urged.

How Was Power Centralised and the Judiciary Challenged?

She relied on the Prime Minister’s Secretariat, where P.N. Haksar became the first principal secretary, with advisers such as T.N. Kaul, D.P. Dhar, P.N. Dhar and R.N. Kao. The Research and Analysis Wing was set up in 1968 with Kao as head. The tension with the courts over property as a fundamental right led to a series of amendments.

The Janata government repealed several of these steps, as described in The Janata Party Years, 1977-80.

What Were Regional and Frontier Developments?

After 1967 the Samyukta Vidhayak Dal governments of the Jana Sangh, socialists, Swatantra and Congress defectors came and went in the northern states, which is read as the rising political consciousness of intermediate castes that had benefited from land reform. In Madras, a perceived North-South divide, the language issue and the failure of the three-language formula helped the Dravida Munnetra Kazhagam win a large majority in 1967 and form the first non-Congress government there under C.N. Annadurai. In Kerala the CPI and CPM together formed a government with E.M.S. Namboodiripad again as Chief Minister, and in West Bengal after 1969 the CPM and Bangla Congress formed a coalition. The Naxalite movement began in 1967 at Naxalbari, where Kanu Sanyal of the CPM mobilised the rural poor against landlords who had evicted tenants; the CP(ML) was formed in 1969 under Charu Mazumdar and was suppressed. The Shiv Sena was founded in 1966 by Bal Thackeray on the slogan Bombay for Maharashtrians.

What Led to the Emergency?

Enthusiasm for Indira Gandhi began to fade by 1973. Inflation after war expenses, drought and the oil crisis of 1973, falling food-grain output, unemployment and strikes, among them the all-India railway strike of May 1974, hurt her support. Rich peasants resented land reform, industrialists resented nationalisation and the middle classes resented price rise and corruption. The grant of a licence to produce a small car to Sanjay Gandhi, who had little experience, was widely seen as nepotism.

The Nav Nirman movement in Gujarat from December 1973 to March 1974 forced the Chief Minister Chimanbhai Patel to resign and led to President’s Rule. In Bihar, student protests were taken up by Jayaprakash Narayan, who called for Total Revolution against corruption, asked for the dissolution of the assembly, and urged people to gherao legislatures and to stop paying taxes. The movement lost momentum by the end of 1974. On 12 June 1975 Justice Sinha of the Allahabad High Court, in a petition filed by Raj Narain, declared her election to the Lok Sabha in 1971 invalid for electoral malpractice and use of government machinery, which would bar her from office and from election for six years. On 24 June the vacation judge V.R. Krishna Iyer granted a conditional stay, letting her stay as Prime Minister but not vote in Parliament. The Congress lost the Gujarat elections, JP revived his agitation, and a civil disobedience campaign was announced for 29 June.

On her advice President Fakhruddin Ali Ahmed declared a state of internal emergency under Article 352 on 25-26 June 1975 on grounds of internal disorder; the cabinet endorsed it after the event. In her broadcast she spoke of a deep and widespread conspiracy and of attempts to incite the army and the police. Historians have blamed both sides: the sociologist Joe Elder wrote that JP erred in starting a mass movement without a disciplined, non-violent cadre while the Prime Minister over-reacted, and P.N. Dhar wrote that both JP and Indira Gandhi failed democracy and showed little faith in the rule of law. The Kerala dismissal of 1959 is in Growth of Other Political Parties.

What Happened During the Emergency?

• President’s Rule was imposed in Gujarat and Tamil Nadu, the two states ruled by non-Congress parties, and all pending assembly elections were postponed.
• Opposition leaders such as Jayaprakash Narayan, Vajpayee, Advani, Morarji Desai, Charan Singh and Asoka Mehta, Congress dissenters such as Chandra Shekhar, and journalists, union and student leaders were arrested under the Maintenance of Internal Security Act (MISA); the Anand Marg, RSS, Jamaat-i-Islami and CPI(ML) were banned.
• Fundamental rights were suspended and civil liberties curtailed through amendments to MISA and the Defence of India Act in July 1975; the press was censored and some papers printed blank editorials.
• Sanjay Gandhi, without an official post, led programmes of slum demolition and forced sterilisation that caused great misery.
• A Twenty Point Programme gave an appearance of welfare and discipline, and the middle classes at first welcomed order, price control and the end of strikes; the CPI supported the Emergency and later regretted it, while the CPM opposed it.

By mid-1976 the mood had changed. The economic improvement, helped by good monsoons, could not be sustained, welfare programmes ran slowly, fear and abuse of power grew, and the excesses were greater in the north than in the south. At the AICC session in Guwahati in 1976 sycophancy became part of the party culture, Sanjay Gandhi made his political debut and the way was opened for dynastic politics. In January 1977 elections were announced, prisoners were released and censorship was lifted.

How Did the Emergency End?

The Jan Sangh, Congress (O), Bharatiya Lok Dal under Charan Singh and the Socialist Party formed the Janata Party, and in February 1977 Jagjivan Ram, Nandini Satpathy and H.N. Bahuguna formed Congress for Democracy, which allied with Janata. The vote of March 1977 was in effect a referendum on the Emergency. The Janata alliance won 330 of 542 seats; both Indira Gandhi and Sanjay Gandhi lost their seats. The Congress did well in the south, which had escaped most of the excesses, winning most of its roughly 150 seats there. The Emergency ended on 21 March 1977. The elections showed that the electorate had understood the value of civil rights and that democracy was well rooted. The new government and its record are in The Janata Party Years, 1977-80, and the later years of the same leader are in Indira Gandhi, 1980-84: Punjab Turmoil and Operation Blue Star.

Why Is This Topic Important?

• Economic measures Dates and features of nationalisation and the MRTP Act are frequent facts
• Emergency and amendments 38th, 39th and 42nd Amendments are standard questions
• Congress split Explains the new party system

What Came Next?

The next topic covers the war of 1971 and the birth of Bangladesh. Next topic: Indo-Pak War of 1971 and the Birth of Bangladesh.

Key People and Terms

• Garibi Hatao Congress (R)’s slogan of 1971
• Congress (R) and Congress (O) The two groups after the 1969 split
• MISA Maintenance of Internal Security Act
• Total Revolution Jayaprakash Narayan’s call in Bihar
• Twenty Point Programme The welfare package announced in 1975
• 42nd Amendment The 1976 amendment called a mini Constitution

Exam Corner

Mains Angle

Questions ask about politics, economy and the Emergency. These points add depth.

• Politics Syndicate versus the Prime Minister
• Economy State control after 1969
• Emergency Causes and consequences