Economic crisis and unrest after 1971

Detail

1. The broken promise of "Garibi Hatao"

• Garibi hatao ("remove poverty") was the Congress slogan in the 1971 Lok Sabha election. It helped Indira Gandhi win a large majority.
• After 1971-72, the social and economic condition of ordinary people did not improve much.
• NCERT's student asks what happened to the promise. The question matters because people had expected a lot, and the gap between promise and result fed the anger of 1973-75.

2. Why the economy came under strain

The cost of the Bangladesh war (1971)

• About 8 million refugees came into India from East Pakistan (now Bangladesh). Feeding and housing them was very costly.
• War with Pakistan followed in December 1971.
• After the war, the USA stopped all aid to India.

The oil shock of 1973

• Oil shock of 1973 means a sudden, sharp rise in world oil prices. Arab oil-producing countries cut supply and raised prices after the Arab-Israel war of October 1973.
• India bought much of its oil from abroad, so prices of almost everything went up:
• Inflation of 23% in 1973

• Inflation of 30% in 1974

• Rising prices hurt the poor and salaried people the most.

Other pressures (1972-74)

• Industrial growth was low.
• Unemployment was high, mainly in rural areas.
• The government froze the salaries of its employees to save money. This angered a large, organised group.
• The 1972-73 monsoon failed. Foodgrain output fell by 8%.

Cause	Effect
8 million refugees + 1971 war	Heavy cost to government
End of US aid after 1971	Less money from abroad
Oil shock, October 1973	23% inflation (1973), 30% (1974)
Monsoon failure, 1972-73	Foodgrain output down 8%
Salary freeze	Government employees angry

3. The protest ecology

• Opposition parties used the economic crisis to organise popular protests against the government.
• Student unrest, which had grown since the late 1960s, became stronger. This led into the Gujarat and Bihar movements of 1974, covered in the next part of this chapter.
• At the same time, some groups gave up on the democratic process altogether.

4. The Naxalite movement

What it is

• The Naxalite movement was an armed revolutionary movement of poor farmers and landless labourers. Its aim was to overthrow the capitalist order (an economic system where land, factories and wealth are privately owned) by force.
• It took its name from the Naxalbari uprising of 1967 in Darjeeling district, West Bengal. Left-wing extremism in India grew out of this uprising and was shaped by Maoist ideas of armed revolution [3].

How it was formed

• The Communist Party of India (Marxist), or CPI(M), was formed in 1964 after a split in the CPI [4].
• Some CPI(M) members broke away and formed the Communist Party of India (Marxist-Leninist), or CPI(ML), in 1969. Its leader was Charu Majumdar.

What it believed and did

• It rejected elections and Parliament. It saw them as tools of the rich.
• It used guerrilla methods (small armed groups making surprise attacks) against landlords and the state.
• It was strongest in West Bengal. The state government crushed it with strong police action.

Beyond NCERT: later history

• The movement split into many groups. Two of the biggest came together later:
• the People's War (PW/PWG), active in Andhra Pradesh, and

• the Maoist Communist Centre of India (MCCI), active in Bihar and nearby areas.

• They merged on 21 September 2004 to form the CPI (Maoist) [2].

• The Union government added the CPI (Maoist) to its list of terrorist organisations under the Unlawful Activities (Prevention) Act, 1967 (UAPA) in 2009 [5].
• Constitutional angle: Police and Public Order are State List subjects in the Seventh Schedule (List II, Entries 2 and 1). States lead the fight against the movement, and the Union helps with forces and funds.
• Left-wing extremism (LWE) is now a GS-III internal security topic. A June 2026 PIB backgrounder says that combined security and development efforts have defeated LWE and describes a "Naxal-free India" [6]. Check the latest official status before you write about it in an exam.

5. The railway strike of May 1974

Who and why

• The National Coordination Committee for Railwaymen's Struggle, led by George Fernandes, called a nationwide strike of railway employees.
• Demands: bonus and better service conditions (pay, working hours, job rules).

How the government responded

• The government declared the strike illegal.
• It arrested the leaders.
• It sent the Territorial Army (a part-time volunteer force that supports the regular Army) to guard railway tracks.

Result

• The strike was called off after 20 days, with no settlement.
• Workers felt the government was against them. The anger added to the mood of 1974-75.

The debate it raised

• NCERT's box asks: what if the railways stop? The railways carry people, food and coal, so a strike hits the whole country.
• This raises a key question. Should workers in essential services (services society cannot do without, such as railways, power and hospitals) be allowed to strike?
• Legal anchors:
• Article 19(1)(c) gives citizens the right to form associations and unions.
• The Supreme Court has held that this does not include a fundamental right to strike. See Kameshwar Prasad v. State of Bihar (1962) and T.K. Rangarajan v. Government of Tamil Nadu (2003).
• Governments can ban strikes in essential services by law, for example under the Essential Services Maintenance Act.

Prelims Hooks

• Railway strike, May 1974 ↔ George Fernandes, National Coordination Committee for Railwaymen's Struggle. (NCERT exercise match)
• Railway strike: 20 days, declared illegal, Territorial Army guarded the tracks, no settlement.
• Inflation: 23% in 1973, 30% in 1974 (NCERT figures).
• Oil shock ↔ Arab-Israel war, October 1973.
• 1972-73 monsoon failure → foodgrain output fell 8%.
• About 8 million refugees came from East Pakistan in 1971. After the war, the USA stopped all aid.
• Naxalbari uprising: 1967, West Bengal. CPI(ML): 1969, led by Charu Majumdar, who broke away from the CPI(M). The CPI(M) itself was formed in 1964 [4].
• CPI (Maoist) = PWG + MCCI merger, 21 September 2004 [2]. It was banned as a terrorist organisation under UAPA, 1967 [5].
• Trap: the right to strike is not a fundamental right. Article 19(1)(c) protects forming unions, not striking.
• Trap: Police and Public Order are in the State List, not the Union List.

Mains Points

• Economic crisis as political crisis (GS-I): the refugees, the war, the end of US aid, the oil shock and the failed monsoon all hit together in 1971-74. Inflation and joblessness turned the hope of garibi hatao into anger. That anger fed the student, opposition and labour protests that came before the Emergency of 1975.
• Two kinds of dissent: the Naxalites rejected democracy and took up arms. The railway workers and the opposition protested within democracy. The state used force against both. One question for answers is whether treating legal protest like a law-and-order problem made the 1975 crisis worse.
• Essential services vs workers' rights (GS-II): the 1974 strike shows a lasting trade-off. Unions are protected under Article 19(1)(c), but courts have held there is no fundamental right to strike. Possible middle paths include strong dispute-settlement systems, time-bound wage commissions and limited strike bans only for truly essential services.
• LWE as development plus security (GS-III link): the Naxalite movement grew from land hunger and rural poverty. Its later decline came from security action combined with development work [6]. It is a case study for why governance gaps matter as much as policing.