Oil shock of 1973
Topic: The Emergency (1975-77) and the Crisis of Democratic Order · NCERT: Class 12, Ch 4 "India's External Relations"; Class 12, Ch 6 "The Crisis of Democratic Order"
Meaning
The oil shock of 1973 was a sudden, steep rise in world oil prices. Arab oil-producing countries raised prices sharply after the Arab-Israel war of October 1973. India bought much of its oil from abroad, so prices of almost everything in India went up. This price rise (inflation) was one of the economic troubles that caused unrest before the Emergency of 1975.
Example
Indian prices rose 23% in 1973 and 30% in 1974. Other strains came at the same time: the cost of the Bangladesh war, the end of US aid, a failed monsoon that cut foodgrain output by 8%, and high unemployment. Together they caused the anger behind the Gujarat and Bihar student protests of 1974.
Don't confuse with
- Garibi hatao: the 1971 Congress promise to remove poverty. The oil shock was an outside event that made that promise harder to keep.