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Indira Priyadarshini Gandhi(इदरा पयिशनी गादधी )

Born on November 19, 1917 – Died on October31, 1984

Prime Minister of India from January 19, 1966 to

March 24, 1977,

And from January 14, 1980 until herassassination on October 31, 1984.

The daughter of Prime Minister Jawaharlal Nehru(and not related to Mahatma Gandhi),

She was one of modern India's most politicallynotable leaders.

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Finance Minister of

India26 June 1970 – 29 April

1971

Preceded by Morarji Desai

Succeeded by

Yashwantrao Chavan

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Indira's tenure began with a major food shortage on

top of the usual back-breaking poverty, ignoranceand economic stagnation.

She pushed and passed a major TEN POINT

PRAGRAMME through the Congress Working

Committee

The restrictive period under Mrs. Indira Gandhi’s 17year rule, with her 10 point programme, held the

economy back and kept poverty levels high.

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Wide Ranging policy changes:NATIONALAZATION OF BANKS

Ceilings on Urban Property andIncome

Curbs on Business Monopolies andConcentration of Economic Power

Public Distribution of Food Grains

Rapid Implementations of Land

ReformsProvision for House Sites to theRural Poor

Abolition of Princely Privileges

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The most controversial of her reforms was thenationalization of all the country's banks.

The move reflected the anger of ordinary people at the

time as several private banks had collapsed,bankrupting depositors.

Moreover, a large number of private banks wereactually operated by holding companies with wide-

ranging business interests that did not necessarily alignwith smallholders' interests.

Desai and the right-wingers, as well as the economicestablishment, staunchly opposed the move.

The nationalized network of banks Gandhi created aresuccessful and widely trusted institutions today, buthave been accused of holding back India's economicperformance due to inflexibility.

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ECONOMIC DECLINE

• In the years 1966-1977 Average GDP

Growth Rate of India became 2.6 % from

4.1 % in 1951-1965 (Nehru’s Era)

• With the population growing at 2.3 % per

annum , the Per Capital Income Growth of

just 0.3 %

• A Virtual Standstill in the Average Living

Standards

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The Reason For this Decline

Two Consecutive drought years 1965 – 67

The agricultural sector still prone to weather-related shocks.

Imports exceeded exports throughout theperiod from 1966 to 1984 with the exceptionof 1972.

War with Pakistan in 1971The Oil Crisis of 1973 hit India's economy

hard, as the country depended on oil imports.

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Slow down in Industry must be attributed to

largely to the strangulation by highly

restrictive trade policies in all spheresLimits on production were placed, to prevent

monopolization -

These limits were usually below point where"economies of scale"

Monopolies & Restrictive Trade Policies

Act,1969 was passedForeign Exchange Regulations Act,1973 was

passed

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Nationalizing the wholesale trade in wheat in

1973. A worldwide oil crisis in 1973, coupledwith a series of poor harvests, brought about

severe inflation.

Gandhi began to lose support after severalunpopular moves, such as rescinding on the

nationalization of wholesale wheat trade and

the testing of the country’s first atomic device

in 1974.

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High levels of import tariffs with average

tariff rates on capital goods at 95% and

peak tariffs as high as 200%; tariffs onconsumer goods as high as 140% often

coupled with quantity restrictions.

In 1977, Coca Cola was banned in India

(readmitted in 1993).

Overstaffed and inefficient public sector

Until mid-80s, unemployment as high as

40%

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INDIRAS RELATIONSHIP WITHUNITED STATES

She succeeded in negotiating a major food

import from U.S. President Lyndon Johnson,

more U.S. economic aid 1967.

Indira refused to back Johnson over the

Vietnam War, and

Johnson defaulted on the promised aid

package.

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DEVALUATION OF

RUPEE• During the early

1980s, Indira's

administrationfailed to arrest the

40 percent fall in

the value of theIndian Rupee from 7

to 12 to the US

Dollar.

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Special agricultural innovation programs and extra governmentsupport

Rather than relying on food aid from the United States - the countrybecame a food exporter.

That achievement, along with the diversification, has become knownas the "Green Revolution".

At the same time, the White Revolution was an expansion in milkproduction

India's rice production increased from 45.6 million metric tons in 1966 to 87.5million metric tons in 1984.

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Established in the early 1960s, the Green Revolution

was the unofficial name given to the Intense

Agricultural District Program (IADP)The program was based on four premises:

1) New varieties of seed(s),

2) Acceptance of the necessity of the chemicalization

of Indian agriculture, i.e. fertilizers, pesticides, weed

killers, etc.,

3) A commitment to national and international

cooperative research to develop new and improvedexisting seed varieties,

4) The concept of developing a scientific, agricultural

institutions in the form of land grant colleges.

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AFTERMATH

Indira's government faced major problems after 1971.Sycophancy enveloped her administration

Socialism and a burgeoning bureaucracy brought majorinefficiency and corruption into the national economy and

administration.The Green Revolution was transforming the lives of India's

vast underclasses, but not with the speed promised underGaribi Hatao.

Job growth was not strong enough to curb the widespreadunemployment.

A government contract to build India's first indigenous carwas awarded to Sanjay Gandhi, whose Maruti companysubsequently failed to produce a single unit.

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EMERGENCY

• Indira's emergency rule lasted nineteen months. During this time, in spiteof the controversy involved, the country made significant economic andindustrial progress. This was primarily due to the end of strikes infactories, colleges and universities, and the disciplining of trade union andstudent unions power. Production and government work become moreefficient. Tax evasion was reduced by zealous government officials,

although corruption was resilient. Agricultural and industrial productionexpanded considerably under Indira's 20-point Programme; revenuesincreased, and so did India's financial standing in the internationalcommunity. Against this must be counted the arrest and torture of thousands of political activists, the ruthless clearing of slums aroundDelhi's Jama Masjid area ordered by Sanjay Gandhi which left hundreds of thousands of people homeless and thousands killed, and the familyplanning program which forcibly imposed vasectomy on thousands of fathers and was often poorly administered, nurturing a public angeragainst family planning that persists into the 21st century.

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"The national Government's attitude towardsbusiness went from outright hostile tosupportive".

"Economic dynamism”(of the 1980s) created afertile environment not just for incumbents, butalso for entrants and new activities.

The economic environment was turning more

business-friendly.Wipro first ventured into IT in 1980 and Infosys

was founded in 1981.

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To this day, Indira's legacy as Prime Ministerremains mixed.

Her phrase "poverty is the greatest polluter"

in her remarkable speech at the first UN WorldEnvironmental Conference in Stockholm in1972 set her (and India at the time) apart inattempting to harmonise environmental anddevelopmental concerns in developingcountries.

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Corruption has been an integral part of India's

life from times immemorial.

In Indira's time it took a big leap forward

because of the rising costs of elections and

the promotion of an atmosphere far more

permissive than Nehru would have tolerated.

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The pride of place in it is occupied by her brilliantstewardship in 1971 of the war for the liberationof Bangladesh

She pushed forward the Green Revolution toensure that India could feed itself.

India cherishes two of her sterling attributes thatovershadowed all else.

One was her absolute refusal to compromiseIndia's sovereignty, unity, supreme interests andhonour; the other her unique empathy with thepoor.

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It was in Indira's time that

India became the Third

largest reservoir of skilledscientific and technical

manpower, the Fifth

military power, the Sixthmember of the nuclear

club, Seventh in the race

for space and the 10thindustrial power.

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