Srinath Raghavan’s Indira Gandhi and the Years That Transformed India, published by Penguin Random House, India, is a political history of India under Indira Gandhi’s rule. This was a time, he argues, was marked by three systemic changes: “in the political system, in the mode of politics, and in the management of the economy.” This excerpt from the book focusses on changes to the industrial-policy framework after the declaration of the Emergency, including a decrease in controls and regulations, and firms being permitted to produce more than their approved capacity. “These policy measures were complemented by a series of authoritarian steps to ‘discipline’ the organised working class,” Raghavan writes. “Some 2,000 union leaders and members were incarcerated and strikes proscribed. Across the board, bonuses were sliced and benefits trimmed. Protests against these measures were smashed by the hammer-blows of the state.”
FIVE DAYS AFTER she had declared the Emergency, Indira Gandhi took to the airwaves again. The Emergency, she said, gave her government “a new opportunity to go ahead with our economic tasks.” She proceeded to unveil a lengthy list of policies that was soon dubbed the “20-point programme.” This spaghetti bowl of ideas was hastily concocted and seasoned with suggestions from diverse sources, including old advisors like PN Haksar and political allies such as the CPI.
This new programme was, in important ways, continuous with the economic policies that had been pursued prior to 26 June 1975. For a start, there was renewed emphasis on conservative macroeconomic policy to tame inflation and a liberalising industrial policy of reducing controls and regulations. “The first and foremost challenge,” the prime minister declared, was to control inflation and ensure that the foreign exchange reserves remained strong. She went on to admit that the licensing regime had “come in the way of new investment, causing delay. These will be simplified.” Limits on the investments of those industries that needed neither imports nor government financing would be raised.
The second major objective was amelioration of poverty by targeted programmes, especially for the rural poor: landless labourers, artisans, and small and marginal farmers. These included steps to “liquidate rural indebtedness” and provide institutional credit to the poor, starting with a moratorium on repayment; legislation to enhance the rural minimum wage; provision of rural housing; and, above all, the implementation of land reforms and distribution of surplus land among the landless “with redoubled zeal.” All this was held out as potential benefits of the spell of dictatorship that she had inaugurated. Warning the people not to expect “magic remedies and dramatic results,” she declared that poverty could only be eliminated by “hard work sustained by clear vision, iron will and the strictest discipline.” Indeed, official propaganda would cast the Emergency as a tonic “era of discipline.”