The war made the Congress government at center highly popular, Indira Gandhi used this opportunity to strengthen her grip over states as well; as such, the central government dissolved almost all the state assemblies. Consequently, elections were held in March 1972 for the legislative assemblies in all states except U.P., Tamil Nadu, Kerala and Orissa. Riding on the war popularity, Congress won a majority in all the states. The political command at both the Centre and the states was now unified. Indira Gandhi had also acquired virtually complete control over the party, her Cabinet, and the chief ministers.
Then, suddenly in 1973, the tide changed for Indira Gandhi. The economy, the polity, and the credibility of Indira Gandhi’s leadership and Congress government started going downhill. The disillusionment found expression in the J.P. movement of 1974. It was followed by the Emergency in 1975.
In between the 1971 war and the imposition of emergency, India achieved a major success in terms of a breakthrough in science and technology when the Atomic Energy Commission detonated an underground nuclear device at Pokhran in the deserts of Rajasthan on 18 May 1974. The Indian government, however, declared that it was not going to make nuclear weapons even though it had acquired the capacity to do so. It claimed that the Pokhran explosion was an effort to harness atomic energy for peaceful purposes and to make India self-reliant in nuclear technology.
By the beginning of 1973 Indira Gandhi’s popularity began to decline. People's expectations were unfulfilled. Little dent was being made in rural or urban poverty or economic inequality, nor was there any lessening of caste and class oppression in the countryside.
The immediate provocation for the rising discontent was the marked deterioration in the economic situation. A combination of recession, growing unemployment, rampant inflation and scarcity of foodstuffs created a serious crisis. The burden of feeding and sheltering nearly 10 million refugees from Bangladesh during 1971 had depleted the grain reserves and, combined with the cost of the Bangladesh war, had led to a large budgetary deficit. The war had also drained foreign exchange reserves. Monsoon rains failed for two years in succession during 1972 and 1973, leading to a terrible drought in most parts of the country and a massive shortage of foodgrains, and fuelling their prices.
The drought also led to a drop in power generation and combined with the fall in agricultural production, and therefore in the demand for manufactured goods, led to industrial recession and rise in unemployment 1973 also witnessed the notorious oil-shock when world prices of crude oil increased four-fold, leading to massive increase in the prices of petroleum products and fertilisers. With all this, prices rose continuously, by 22 per cent in 1972-73 alone. The price rise, which affected both the poor and the middle classes, was accompanied by scarcity of essential articles of consumption. Economic recession, unemployment, price rise and scarcity of goods led to large-scale industrial unrest and a wave of strikes in different parts of the country during 1972 and 1973, culminating in an all-India railway strike in May 1974. The railway strike lasted twenty-two days but was broken in the end. In May 1973, there was a mutiny in U.P. by the Provincial Armed Constabulary, which clashed with the army sent to discipline it, leading to the death of over thirty-five constables and soldiers.
Congress had been declining as an organization and proved incapable of dealing with the political crisis at the state and grassroots levels. The government's capacity to redress the situation was seriously impaired by the growing corruption in most areas of life and the widespread belief that the higher levels of the ruling party and administration were involved in it. The whiff of corruption touched even Indira Gandhi when her inexperienced younger son, Sanjay Gandhi, was given a licence to manufacture 50,000 Maruti cars a year.
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