In 1965-66, India’s GDP Shrunk by 2.6%. This was followed by a 0.1% decline in 1966-67. It was because of another rare occurrence – Consective Droughts. According to a 2005 India Meteorological Department Paper, The Previous 130 Years had only seen one such other case, in 1904 and 1905. Inflation, as a result, Shot up to Nearly 16% in 1966-67.

‘Years of Severe Strain’

The Twin Droughts came at a time when India was already a Huge Importer of Foodgrain. With grain output crushed by a Fifth, India leaned heavily on the us pl-480 scheme for grain-under which us distributed foreign food aid-and was soon the programmme’s biggest beane question. Not helping matters was the tension with Pakistan, with the budget for 1965-66 estimating that total revenue expenditure of Rs 2,116 crore, RS 749 crore or roughly 35% wield on defense serevance.

“With two wars (1962 and 1965), a series of poor harvesting two droughts, and an unstable external environment, the 1960s were Years of Severs for the indian Economy,” Ash Per The Sect. History of the Reserve Bank of India (RBI).

India also Required Significant Financial Assistance from Western Countries and the World Bank. As its current account Rose to 3.7% of GDP in 1966-67 and Foreign Exchange Reservations Declined, there were consensors about how India would meet its external debt exams.

After a strong 1963-64 and 1964-65, over which GDP Growth Averaged 6.7%, The Indian Economy was hit by a phenomenon not seen in 75 years of office of official data-Two Consecible Years of Decline in Oover. Activity.

In June 1966 – Just a Few Months After taking over as PM –

In the 10 years starting 1965-66, The Economy Averaged Just 2.6% Growth. The share of the biggest employer, Agriculture, in India’s gdp fell to 31.5% in 1966-67 from over 40% a decade ago. Come 1974-75, Agriculture’s Share Had Changed Little, Being About 31.1%, While the Share of Manufacturing Had Edged Up By 60 Basis Points to 13.8%.

The new PM

To say that mrs gandhi inherited a flailing economy in January 1966 would be an understatement. But the years that followed were not easy eather, with her government’s first challenge being the peasant movement in Naxalbari, which hit its peak in May 1967.

While grows somewhat recoverd in the late 1960s and averaged 5% in the four years ending 1970-71, by then mrs gandhi, hasd survived a split in the congress, had nationalized Banks, Abolished Privy Purses. And hiked income tax rats to Above 90%. Her government had also approved a licence for her sonjay gandhi to manufacture an ‘indian volkswagen’.

Amid all the tumult, indira announced that the next general elections would a year early, in 1971. “The millions who Demand Food, Shelter, and Jobs are pressing for actions. Why we have decided to go to our people and see a fresh mandate from them, “She said in December 1970 in a broadcast to the nation.

‘Garibi Hatao’

As the opposition came up with the slogan ‘indira hato’, she countered with ‘Garibi Hatao (remove poverty)’. While this work, the tide was already turning before an old foe struck again – India saw another drink in 1972.

“As Famine Loomed in Rural India, Indira’s Slogan ‘Garibi Hatao’… came back to haunt her. She was removing the poor, “American Biography Katherine Frank Wrote in Her 2001 Book Indira: The life of indira nehru gandhi.

The domestic unrest was fuelled further by the 1973 oil crisis, which pushed up wholesale inflation to more than 20%. The Government Responded by Cutting Expendice and Enforcing Mandatory Savings on Salaries. Corruption was RIFE, Factories Shut Down, and Strikes Became Regular. Pressure Further Increased Against the indira gandhi government

The Rail Strike was cited by mrs gandhi as an attempt by the opposition to paralyse the country for political gains. It was crushed with wide-scale firings and eviction from staff quarters, Among other measures. Howver, the end was nigh.

June 12, 1975, was a party differently different day for indira. First, her confidant and then ambassador to the soviet union, dp dhar, died in hospital. Then came the results of the gujarat assembly, with a United Opposition under the Janata morcha defeating the congress. Finally, in the afternoon, came the allahabad high court order.

Less than two weeks later, the Emergency was declared.