with U.S. President
Richard Nixon, 1971 In 1967, following a poor performance in the
1967 Indian general election,
Indira Gandhi started moving toward the political left. In mid-1969, she was involved in a dispute with senior party leaders on several issues. Notably—her support for the independent candidate,
V. V. Giri, rather than the official Congress party candidate,
Neelam Sanjiva Reddy, for the vacant post of the
president of India and Gandhi's abrupt nationalisation of the 14 biggest banks in India. Later in the year, the Congress party president,
S. Nijalingappa, expelled her from the party for indiscipline. Mrs. Gandhi as a counter-move launched her own faction of the INC. It was also known as Congress (R). The original party then came to be known as
Indian National Congress (O). Its principal leaders were Kamraj, Morarji Desai, Nijalingappa and
S. K. Patil who stood for a more right-wing agenda. The split occurred when a united opposition under the banner of
Samyukt Vidhayak Dal, won control over several states in the
Hindi Belt. Indira Gandhi, on the other side, wanted to use a populist agenda in order to mobilise popular support for the party. In the All India Congress Committee, 446 of its 705 members walked over to Indira's side. This created a belief among Indians that Indira's Congress was the Real Congress (INC-R). The "Old Congress" retained the party symbol of a pair of bullocks carrying a yoke while Indira's breakaway faction was given a new symbol of a cow with a suckling calf by the Election Commission as the party election symbol. In the mid-term parliamentary elections held in 1971, the Gandhi-led Congress (R) won a landslide victory on a platform of progressive policies such as the elimination of poverty (). The policies of the Congress (R) under Gandhi before the 1971 elections included proposals to abolish the
Privy Purse to former rulers of the
Princely states, and the 1969
nationalisation of India's 14 largest banks. The 1969 attempt by Indira Gandhi government to abolish privy purse and the official recognition of the titles did not meet with success. The constitutional Amendment bill to this effect was passed in Lok Sabha, but it failed to get the required two-thirds majority in the Rajya Sabha. However, in 1971, with the passage of the
Twenty-sixth Amendment to the Constitution of India, the privy purses were abolished. Due to
Sino-Indian War 1962, India faced a huge budgetary deficit resulting in its treasury being almost empty, high inflation, and dwindling forex reserves. The brief War of 1962 exposed weaknesses in the economy and shifted the focus towards the defence industry and the
Indian Army. The government found itself short of resources to fund the Third Plan (1961–1966).
Subhadra Joshi a senior party member, proposed a non-official resolution asking for the nationalisation of private banks stating that nationalisation would help in mobilising resources for development. In July 1969, Indira Gandhi through the ordinance nationalised fourteen major private banks. After being re-elected in 1971 on a campaign that endorsed nationalisation, Indira Gandhi went on to nationalise the coal, steel, copper, refining, cotton textiles and insurance industries. The main reason was to protect employment and the interest of the organised labour. However, Gandhi rejected calls to resign and announced plans to appeal to the
Supreme Court. In response to increasing disorder and lawlessness, Gandhi's ministry recommended that President
Fakhruddin Ali Ahmed declare a
State of Emergency, based on the provisions of
Article 352 of the
Constitution. During the nineteen-month emergency, widespread oppression and abuse of power by Gandhi's unelected younger son and political heir
Sanjay Gandhi and his close associates occurred. Implemented on 25 June 1975, the Emergency officially ended on 21 March 1977. All political prisoners were released and fresh elections for the Lok Sabha were called. In
parliamentary elections held in March, the Janata alliance of anti-Indira opposition parties won a landslide victory over Congress, winning 295 seats in the Lok Sabha against Congress's 153. Gandhi lost her seat to her Janata opponent
Raj Narain. On 2 January 1978, she and her followers seceded and formed a new opposition party, popularly called Congress (I)—the "I" signifying Indira. During the next year, her new party attracted enough members of the legislature to become the official opposition. In November 1978, Gandhi regained a parliamentary seat. In January 1980, following a
landslide victory for Congress (I), she was again elected prime minister. The national election commission declared Congress (I) to be the real Indian National Congress for the
1984 general election. However, the designation
I was dropped only in 1996. In 1983, Bhindranwale with his armed followers headquartered themselves in the
Golden Temple in
Amritsar and started accumulating weapons. In June 1984, after several futile negotiations, Gandhi ordered the
Indian Army to enter the Golden Temple to establish control over the complex and remove Bhindranwale and his armed followers. This event is known as
Operation Blue Star. On 31 October 1984, two of Gandhi's bodyguards,
Satwant Singh and
Beant Singh,
shot her with their service weapons in the garden of the prime minister's residence in response to her authorisation of Operation Blue Star. Her assassination prompted the
1984 anti-Sikh riots, during which 3,000–17,000 people were killed. == Rajiv Gandhi and Rao era (1984–1998) ==