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Economic Factors of India's 1975 Emergency

The document discusses the economic reasons behind the declaration of a state of emergency in India in 1975 under Indira Gandhi's leadership. It analyzes factors like high inflation as shown by rising consumer price index levels, decreasing availability of food grains, growing trade deficits, increasing imports and slowing GDP growth rate in the early 1970s. All of these contributed to economic turmoil and unrest among citizens, providing the context for Indira Gandhi to advise declaring a state of emergency. Tables and graphs are presented on trends in these economic indicators in the years leading up to the emergency.

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11 views7 pages

Economic Factors of India's 1975 Emergency

The document discusses the economic reasons behind the declaration of a state of emergency in India in 1975 under Indira Gandhi's leadership. It analyzes factors like high inflation as shown by rising consumer price index levels, decreasing availability of food grains, growing trade deficits, increasing imports and slowing GDP growth rate in the early 1970s. All of these contributed to economic turmoil and unrest among citizens, providing the context for Indira Gandhi to advise declaring a state of emergency. Tables and graphs are presented on trends in these economic indicators in the years leading up to the emergency.

Uploaded by

technovarad9140
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© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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SIMSREE

Economics Behind Emergency


In Indian Perspective

Varad Shastri (M13048) Kunal Akarte (M13002) Ravindra Bharati (M13005)

Background & Political reasons: Emergency in India from 25th June 1975 to 21st March 1977 was of 21 month period. Fakhruddin Ali Ahmad (then President of India), on the advice of Mrs. Indira Gandhi (then Prime Minister of India), declared emergency on 25 th June 1975 under Article 352 of Constitution of India. This was a very smart and dramatic action taken by Indira Gandhi which suspended fundamental and legitimate rights of citizens of India. There were many political reasons behind declaring the emergency. For example Decision of Allahabad High Court in which India Gandhi was found guilty of corruption charges and of misusing government machinery for election campaigning. Her parliamentary membership was canceled and she was asked to resign as Prime Minister. Ex-congressman and socialist Jayprakash Narayan started protest in Bihar, while Morarji Desai and Raj Narain started protest near parliament and Prime Ministers resident in Delhi. Due to all these and many more political reasons India Gandhi advised President of India to declare emergency. Economic reasons: But the economic environment in India was kind of heating from the starting of 1971. Due to high inflation, rising prices, limited supply of essential food grains and increasing unemployment there was turmoil into the minds of common Indian citizen, which result into the unrest. The motive of this paper is to concentrate on those economic points and draw a conclusion. So lets take each factor into consideration.

CPI
30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 1966 -5.00% -10.00%

1968

1970

1972

1974

1976

1978

Year CPI 1967 8.60% 1968 -2.23% 1969 3.54% 1970 5.01% 1971 4.89% 1972 7.66% 1973 23.81% 1974 25.40% 1975 -6.18% 1976 0.00% As we can see from above graph CPI that is Consumer Price Index which is a measure to inflation had abruptly risen in the year 1973 and 1974. The reasons of this inflation was Ravya hey bagh..

NET AVAILABILITY OF CEREALS AND PULSES (Per day Per Capita) (Grams)
480 470 460 450 440 430 420 410 400 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979

Grams

Year

Year

1971 1972 1973 1974 1975 1976 1977 1978

NET AVAILABILITY OF CEREALS AND PULSES (Per day Per Capita) (Grams) 468.8 466.1 421.6 451.2 405.5 424.3 429.6 468

As Per above data Ravya an kunal baghun ghya he

Export Import and Trade Balance


6000 5000 4000

In Rs. Crore

3000 2000 1000 0 -1000 -2000 1971 1972 1973 1974 1975 1976 1977

Axis Title
Exports Imports Trade Balance

Year 1971 1972 1973 1974 1975 1976 1977

Exports Imports Trade Balance 1535 1634 -99 1608 1825 -217 1971 1867 104 2523 2955 -432 3329 4519 -1190 4036 5265 -1229 5142 5074 68

Imports of Goods and services (in US $)


7E+09 6E+09 5E+09

In US $

4E+09 3E+09 2E+09 1E+09 0 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976

Year

Year

1968 1969 1970 1971 1972 1973 1974 1975

Imports of Goods and services (in US $) 2624000000 2356000000 2421333333 2695662885 2650511497 4039170800 5992038200 6545391512

GDP Growth Rate( in %)


10 8 6 4 2 0 1966 -2

1968

1970

1972

1974

1976

1978

1980

Year

1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978

GDP Growth Rate (in %) 7.82596301 3.38792918 6.5397003 5.15722974 1.64293039 -0.5533013 3.29552113 1.18533626 9.14991202 1.66310364 7.25476458 5.71253208

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