Prime Minister Indira Gandhi declared an emergency throughout the country in 1975. For the next two years, the government suspended the fundamental rights of the people. Several opposition leaders were jailed. This part of history is considered a black mark, tarnishing Indian democracy. But what were the exact reasons for imposing the emergency? Why was it done? Why is it considered so terrifying? Let’s understand more about it in this article on “Why Indira Gandhi Imposed Emergency”.
“The President has proclaimed Emergency. This is nothing to panic bond.”
You might be surprised to know that this was not the first time an emergency was declared in the country. Before this, an emergency was declared during the 1962 Indo-China war and the 1971 Indo-Pakistan war. However, the emergency declared in 1975 was different from the other two because it wasn’t due to a war or any single reason. Multiple events led up to it. There was a sequence of events whose outcome was the 1975 emergency, a sequence that actually began in 1969, when the Congress Party was in power and the Fourth Five-Year Plan was being implemented. In 1969, the Congress Party decided that 14 private banks would be nationalized, meaning the government would take ownership of these banks from private companies. Several businessmen, like J.R.D. Tata, along with investors and shareholders, opposed the decision of nationalization.
On 18th July 1969, the government decided to pass the nationalization policy through an ordinance. However, the government soon realized that the parliamentary session was due to begin on 21st July, and the president was set to leave office on the 20th. As a result, the ordinance was drafted in a hurry and, almost overnight, signed by the president before the parliamentary session began. This clearly shows how important Indira Gandhi considered this policy for the welfare of the country.
Indira Gandhi’s Justification for Bank Nationalization
Prime Minister Indira Gandhi justified the nationalization by stating that, under government ownership, banks could expand across the country, providing services even to the poorest citizens—something for-profit companies might avoid, as they prioritize profit over reach. Essentially, this decision represented a clash between socialism and capitalism, each with its own advantages and disadvantages. However, as noted earlier, the bank shareholders were far from pleased with the decision. One such shareholder was R.C. Cooper from the Central Bank of India, who approached the Supreme Court to challenge it. He achieved a small victory when the Court declared the law enacted by the government as discriminatory toward the 14 nationalized banks, deeming it unfair to shareholders. As a result, the court rejected the ordinance. This marked the beginning of a battle between Indira Gandhi and the courts.
When the Supreme Court rejected the ordinance from Indira Gandhi’s government, the government responded the following year by introducing a new constitutional amendment. This amendment effectively reversed the Supreme Court’s judgment. A few years later, a similar clash arose between the Indira Gandhi government and the Supreme Court over the issue of the “privy purse.”
“Privy Purse” used to be a payment given to Royal families of the Princely States in India
The Privy Purse Controversy
The practice of the privy purse originated when the government united all the princely states to form India in 1947, with the condition that the ruling families would receive payments from the Indian government. However, Indira Gandhi opposed these payments, so her government introduced a bill to abolish the privy purse. When the bill couldn’t pass in the Rajya Sabha, the government employed a new approach: they issued a proclamation stating that princely states would no longer be recognized. This meant there would be no more ruling families, making the privy purse unnecessary. Once again, the matter reached the Supreme Court, which declared the proclamation null and void. In response, the Indira Gandhi government introduced a constitutional amendment in 1971, explicitly abolishing the privy purse for ruling families, thereby reversing the court’s judgment.
The royal families were quite angered by the decision, prompting them to protest by running for elections. At that time, the Nawab of Pataudi was Mansoor Ali Khan Pataudi, the father of Bollywood actor Saif Ali Khan. He contested elections from Gurgaon but couldn’t secure enough votes. On the other hand, another royal family, Vijaye Raje Scindia and her son Madhav Rao Scindia, successfully contested the 1971 elections and won.
Indira Gandhi Won 1971 Elections
Indira Gandhi won the 1971 elections again and became a very dominant Prime Minister. Under her centralization of power, it was evident that she selected the chief ministers of various states and cabinet ministers based on her personal preferences and favoritism.
In 1971, the Indo-Pakistan war took place, which had a terrible impact on the Indian economy. Inflation rose, and the prices of essential commodities increased rapidly. At the same time, the Congress Party had become so powerful that corruption had crept into its ranks. Even Indira Gandhi’s principal secretary pointed this out. The corruption in the state government was particularly severe. In 1974, a major scam involving Chimanbhai Patel, the Chief Minister of Gujarat, surfaced, leading people to call him “Chiman Chor” in the state.
People took to the streets to protest; students demonstrated, buses were burned, shops were looted, and the police were attacked. This uprising became known as the Navnirman Movement, which was a strong demand from the people of Gujarat to dissolve the state government. Indira Gandhi was left with no choice but to dissolve the state government.
The 1973 Oil Crisis: Fueling Unrest in India
In 1973, just a year earlier, there was a terrible international oil crisis. As a result, by 1974, crude oil prices skyrocketed by 300%. Once again, common people were affected, leading to devastating inflation and price rises. In the same year, a movement similar to the one in Gujarat began in Bihar, led by J.P. Narayan. Non-violent protests were held against the corruption of the Congress government, and the dissolution of the Bihar government was demanded.
Another leader, George Fernandes, carried out a three-day-long railway strike, demanding better working conditions and salaries for railway workers. More than 1.7 million workers participated, making it one of the largest industrial strikes in the world at the time. A year passed, but Indira Gandhi did not relent. While she dissolved the Gujarat State Government under pressure, she refused to do the same in Bihar, even claiming that the movements were attempting to undermine democracy. Calling them “Foreign-Funded anti-national movements”, but the protest continues.
Constant strikes, devastating inflation, rising prices, unending protests, and allegations of corruption—these factors paint a grim picture of the state of the country in 1975.
In March 1975, Indira Gandhi faced another shock from the Allahabad High Court. The fact was that there had been an ongoing case against her for the past two years, filed by socialist election candidate Raj Narain. He had contested the 1971 elections against Indira Gandhi for the same seat in Raebareli, Uttar Pradesh. Raj Narain was also a freedom fighter but is more popularly known for this case against Indira Gandhi. He directly accused her of winning her seat through unfair means, claiming she had manipulated the ballots. Fourteen crimes were reported against Indira Gandhi. But she was convicted for only 2 of those crimes by the court.
