Devaluation of the rupee (1966)
Topic: Challenges to and Restoration of the Congress System · NCERT: Class 12, Ch 5 "Challenges to and Restoration of the Congress System"
Meaning
Devaluation means officially cutting a currency's value against other currencies. In June 1966, Indira Gandhi's government devalued the rupee. Many people saw the move as made under pressure from the United States. It came during an economic crisis: monsoons had failed, food was short, foreign-exchange reserves were falling and military spending was rising. The move made prices go up and added to public anger before the 1967 election.
Example
After June 1966 one US dollar cost about Rs 7.50 instead of about Rs 4.76. NCERT puts it as "from under Rs 5 to over Rs 7". Prices rose, and bandhs and hartals (strikes and shutdowns) followed. The government treated them as a law-and-order problem, and that made people more bitter.