Dr. Susmit Kumar, Ph.D.

After his party’s resounding victory in the recent assembly elections, PM Modi is now considered to be India’s third mass leader after Jawahar Lal Nehru and Indira Gandhi. PM Modi talked in his victory speech about a “New India’ which he sees as the India of the dreams of the youth, that fulfills the aspirations of women, and provides opportunities for the poor. We see a parallel between PM Modi’s “New India” slogan and Indira Gandhi’s “Garibi Hatao” slogan which she gave during late 1960s and early 1970s.

Like Mr. Modi’s grand success in the 2014 Parliamentary elections and the 2017 assembly elections, Mrs. Gandhi was also riding high after the grand success in the 1971 Parliamentary elections, winning two-third seats, seventy seats more than the undivided Congress won in 1967. Then within just thirteen days in December 1971, India was able to force Pakistani troops to surrender in East Pakistan, leading to the birth of a new nation, Bangladesh. Partly due to the victory over the archrival Pakistan, Mrs. Gandhi’s Congress Party was able to capture 70 percent of the seats in the 1972 State Assembly elections. It is a lesson for Mr. Modi to learn how within a short period of just two years, she faced her nadir due to the collapse of economy and finally lost, including her own seat, in the 1977 parliamentary elections.

During his lifetime, Nehru prepared the ground for his daughter to take over. After next prime minister Lal Bahadur Shastri’s death, Indira Gandhi, daughter of Nehru, was made the prime minister of India by party heavyweights such as Kamaraj and D.P. Mishra, then two Congress Party stalwarts, who did not like the other contender Morarji Desai. The party heavyweights thought that she would be a nice figurehead behind which they could rule. Due to Indira’s shy nature, Ram Manohar Lohiya, a prominent opposition leader in parliament, even named her “gungi gudia” (dumb doll).

Shortly after Indira Gandhi took over the reins, food shortages occurred due to droughts, which worsened the national economy that was already reeling in the aftermath of the 1965 India-Pakistan War. She therefore embarked on a trip to the United States with the main mission to get both food grains and foreign exchange. The USA had suspended aid to India due to the 1965 India-Pakistan War. For any aid or loan, the USA, along with the World Bank and the International Monetary Fund, demanded that India devalue its currency, the rupee. Without consulting the party heavyweights, Mrs. Gandhi devalued the rupee by a sharp 57.5 percent on the basis of a committee report consisting of right-wing ministers and advisors. The party passed a resolution denouncing the devaluation. To make the matter worse, foreign donors reneged on their promise to provide $900 million a year for the next several years.

After being heavily rebuked in public due to the sharp devaluation and no aid, Mrs. Gandhi was advised to shift to the left ideologically by her close advisors, especially by P.N. Haksar, her principal secretary who had replaced L.K. Jha, the chief architect of the currency devaluation. During his studies at London School of Economics in the 1940s, Haksar had been greatly influenced by socialism and had acquired communist friends. He was a friend of Firoze Gandhi, Indira Gandhí’s husband, a student companion from the London days. The ideological shift also helped the new PM to get rid of old party heavyweights, called the Syndicate. In the February 1967 national elections, her party lost 78 seats, barely winning the majority (282 out of 520 seats), and lost majority in seven states. Until the 1967 elections, the Congress Party had been in power at the central level and nearly in all the states, barring one or two. A number of Syndicate leaders lost their seats, notable among them Kamaraj, the party president. On the other hand, Indira won her own seat by a large majority. On the advice of Haksar, she went for the nationalization of banks, bitterly opposed by Morarji Desai, the then Deputy Prime Minister and Finance Minister. Then in May 1967, she announced a ten-point program which included the social control of banks, nationalization of general insurance, state trading in import and export trade, ceilings on urban property and income, curb on business monopolies and concentration of economic power, public distribution of food grains, land reforms, provision of houses for the rural poor, and abolition of princely privileges, granted to the former royal family members who merged their states with India after 1947. This led to a split in party in 1969 and Mrs. Gandhi, heading a minority government (220 out of a total 520 seats in the lower house), was able to survive in parliament only with the help of the CPI, some regional parties, and some independents. Without CPI support she would not have had a majority. During the 1969 spilt, along with her supporters, CPI cadres also took part in rallies to support her.

Indira Gandhi was an opportunist and not a leftist ideologue. Back in 1959, she had pressurized her father, PM Jawahar Lal Nehru, to dismiss the Communist government in Kerala. At that time, she said that the major danger to India was from Communism and even questioned the patriotism of Communists. Mrs. Gandhi was the national president of Congress Party at the time. In 1969, the split in the Congress party established a watershed in the evolution of democracy in India. The Congress (Ruling), as the party was commonly known under Indira Gandhi rule, became a one-person show instead of collective leadership and corruption shot up at the highest level, while Morarji Desai continued to head the “Old Congress” party, also called Congress (Organization). Nehru sowed the seeds of corruption in the country and her daughter institutionalized it. After the split, Mrs. Gandhi went on to dethrone state chief ministers (by misusing the powers of the Central government) who went against her, replacing them with cronies. Haksar went on to consolidate all decision making powers in the Prime Minister’s office and installed loyal civil servants in strategic points in all ministries. The Green Revolution in Punjab and Haryana in 1967-70 greatly increased the national grain production, erasing the memory of famine. On the advice of Haksar, Indira Gandhi brought the national elections forward by a year. In the 1971 elections, her party won a two-third majority in parliament, trouncing the entire opposition.

OPEC raised oil prices fourfold in 1973. The 1972-73 drought in the country again led to a drastic decrease in food grain output. Apart from the drought, food grain stocks went emptied in feeding 10 million Bangladeshi refugees. These events fueled 23 percent inflation in 1973, which stood at 30 per cent by the mid-1974. During 1972 and 1973, there were more than 12,000 strikes in Bombay alone. There had be no food riots during the hardships of 1966 but there were food riots in several cities in 1973 after Mrs. Gandhi’s disastrous plan to make the government the only entity to buy the food grains and imposition of brutal controls. In Kerala, all schools and colleges were closed after students looted food trucks.

In 1973, Indira Gandhi had to swallow her pride and beg the IMF and World Bank for loans as foreign reserves had dropped to a dangerous level. The IMF imposed its bitter medicine to tame budgetary deficits and to reduce subsidies. The government was forced to adopt austerity measures by drastically cutting expenditure, reduction in wages and imposing compulsory savings on salaries and incomes. It was mainly due to these anti-labor policies, the Communist Party of India (CPI), then an ally of Congress (R), lost its base and won only seven seats in the 1977 parliamentary elections as compared to twenty-three seats in the previous 1971 parliamentary elections. Until the early 1970s, the CPI was the flag bearer of the Communist movement in India. Due to being an ally of Mrs. Gandhi’s government and its anti-labor attitude, CPI lost its mass base and since 1977, it has become a junior partner of the present main Communist Party, CPM.

Due to price rises and widespread corruption, Mrs. Gandhi’s popularity went downhill. After losing the Gujarat State Assembly elections in early June 1975, and the rise of the Jayaprakash Narayan Movement (also called JP Movement), a student movement against corruption and for peaceful Total Revolution that attracted hundreds of thousands all over north India, Prime Minister Gandhi imposed Emergency Rule on June 26, 1975, a day after the Supreme Court ruled that although she could attend the parliament but she could not vote. JP was a Gandhian and freedom fighter, and was also respected by Mrs. Gandhi as her mother and JP’s wife were close friends. Mrs. Gandhi decided to hold Parliamentary elections in March 1977 in which she lost to the Janata alliance of parties.

It is certain that PM Modi would have to face an economic downturn in next few years which will be the real test of his leadership. He is fortunate that he took over the reins in 2014, when the crude oil price went down and not earlier. The previous UPA government had faced economic downturns during 2008-9 due to the Global Great Recession and again during 2011-13 due to the higher crude oil price. Higher crude oil price during 2011-13 damaged the Indian economy and rupee significantly. At that time, BJP, being in the opposition, was blaming the then UPA government for the double digit inflation which was actually due to higher the Current Account Deficit (CAD) than normal. In 2013, some economists even started writing the obituary of the Indian economy.

Mr. Modi needs to learn a lesson in the rise and fall of Mrs. Gandhi how a sour economy can bring a mass leader to her nadir within just couple of years. The victory of Donald Trump, a known white supremacist, racist, serial liar, and misogynist, in the 2016 US Presidential election, over the Wall Street favorite Hillary Clinton, also proves that economy plays an important factor in elections. Trump won mainly due to getting votes in the rust belt (Midwest) of the US where people voted for him on just one hope that despite being not a perfect person, Trump might bring back the factory jobs, lost to foreign countries, in last more than three decades.

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