Editing Indira Gandhi (section)

=== Green Revolution and the Fourth Five-Year Plan ===
Gandhi inherited a weak and troubled economy. Fiscal problems associated with the war with Pakistan in 1965, along with a drought-induced food crisis that spawned famines, had plunged India into the sharpest recession since independence.<ref name="Kapila1">{{Cite book| publisher =Academic Foundation| page = 126|url={{Google books|de66PkzcfusC|page=PA126|keywords=|text=|plainurl=yes}}|isbn=978-81-7188-105-5| last1 = Kapila| first1 = Raj| last2= Kapila| first2= Uma| title = Understanding India's economic Reforms| year = 2004}}</ref><ref name="Rosser" /> The government responded by taking steps to liberalise the economy and agreeing to the devaluation of the currency in return for the restoration of foreign aid.<ref name="Kapila1" /> The economy managed to recover in 1966 and ended up growing at 4.1% over 1966–1969.{{sfn|Malik|1988|pp=60–72}}<ref name="Nayak">{{Cite book| publisher = [[SAGE Publications]]| pages = 8–9|url={{Google books|TxkfWrkb2n4C|page=PA8|keywords=|text=|plainurl=yes}}|isbn=978-81-321-0452-0| last = Nayak| first = Pulin|author2=Bishwanath Goldar |author3=Pradeep Agrawal | title = India's Economy and Growth| year = 2010}}</ref> Much of that growth however, was offset by the fact that the external aid promised by the United States government and the [[International Bank for Reconstruction and Development]] (IBRD), meant to ease the short-run costs of adjustment to a liberalised economy, never materialised.<ref name="Kapila1" /> American policy makers had complained of continued restrictions imposed on the economy. At the same time, Indo-US relations were strained because of Gandhi's criticism of the American bombing campaign in Vietnam. While it was thought at the time, and for decades after, that President Johnson's policy of withholding [[Food for Peace|food grain shipments]] was to coerce Indian support for the war, in fact, it was to offer India rainmaking technology that he wanted to use as a counterweight to China's possession of the atomic bomb.<ref>{{Cite web |url=http://faculty.georgetown.edu/khb3/Osiris/papers/Doel-Harper.pdf |title=Prometheus unleashed: Science as A diplomatic weapon in the Lyndon B. Johnson administration |access-date=3 February 2016 |archive-url=https://web.archive.org/web/20170215072525/http://faculty.georgetown.edu/khb3/Osiris/papers/Doel-Harper.pdf |archive-date=15 February 2017 |url-status=dead }}</ref><ref name="Oliver">{{cite book|first=Robert W.|last=Oliver|title=George Woods and the World Bank|year=1995|page=144|publisher=Lynne Rienner Publishers |isbn=978-1-55587-503-9}}</ref> In light of the circumstances, liberalisation became politically suspect and was soon abandoned.<ref name="Kapila1" /> Grain diplomacy and currency devaluation became matters of intense national pride in India. After the bitter experience with Johnson, Gandhi decided not to request food aid in the future. Moreover, her government resolved never again to become "so vulnerably dependent" on aid, and painstakingly began building up substantial foreign exchange reserves.<ref name="Kirk">{{Cite book| publisher = Anthem Press| pages = 20–21|url={{Google books|nALKqdykmrwC|page=PA17|keywords=|text=|plainurl=yes}}|isbn=978-0-85728-412-9| last = Kirk| first = Jason A.| title = India and the World Bank: The Politics of Aid and Influence| year = 2011}}</ref> When food stocks slumped after poor harvests in 1972, the government made it a point to use foreign exchange to buy US wheat commercially rather than seek resumption of food aid.<ref name="Kux">{{Cite book| publisher = DIANE Publishing| page = 311|url={{Google books|zcylFXH9_z8C|page=PA311|keywords=|text=|plainurl=yes}}|isbn=978-0-7881-0279-0| last = Kux| first = Dennis| title = India and the United States: Estranged Democracies, 1941–1991| year = 1992}}</ref>

The period of 1967–75 was characterised by socialist ascendency in India, which culminated in 1976 with the [[List of amendments of the Constitution of India|official declaration of state socialism]]. Gandhi not only abandoned the short-lived liberalisation programme but also aggressively expanded the public sector with new licensing requirements and other restrictions for industry. She began a new course by launching the Fourth Five-Year Plan in 1969. The government targeted growth at 5.7% while stating as its goals, "growth with stability and progressive achievement of self-reliance."{{sfn|Malik|1988|pp=60–72}}<ref name="Gupta">{{Cite book| publisher = Deep and Deep Publications| page = 7|url={{Googlebooks|8D0iS_EF8_AC|page=PA7|keywords=|text=|plainurl=yes}}|isbn=978-81-7629-559-8| last = Gupta| first = K. L.|author2=Harvinder Kaur| title = New Indian Economy and Reforms| year = 2004}}</ref> The rationale behind the overall plan was Gandhi's ''Ten-Point Programme'' of 1967. This had been her first economic policy formulation, six months after coming to office. The programme emphasised greater state control of the economy with the understanding that government control assured greater welfare than private control.{{sfn|Malik|1988|pp=60–72}} Related to this point were a set of policies that were meant to regulate the private sector.{{sfn|Malik|1988|pp=60–72}} By the end of the 1960s, the reversal of the liberalisation process was complete, and India's policies were characterised as "protectionist as ever."<ref name="Kirk" />

To deal with India's food problems, Gandhi expanded the emphasis on production of inputs to agriculture that had already been initiated by her father, Jawaharlal Nehru.<ref name="Rosser" /> The [[Green Revolution in India]] subsequently culminated under her government in the 1970s. It transformed the country from a nation heavily reliant on imported grains, and prone to famine, to one largely able to feed itself, and becoming successful in achieving its goal of food security. Gandhi had a personal motive in pursuing agricultural self-sufficiency, having found India's dependency on the U.S. for shipments of grains humiliating.<ref>{{cite book|first=Maya|last=Chadda|title=Building Democracy in South Asia|location=London|publisher=[[Lynne Rienner Publishers]]|year=2000|page=150|isbn=978-1-55587-859-7}}</ref>

The economic period of 1967–1975 became significant for its major wave of nationalisation amidst increased regulation of the private sector.<ref name="Rosser" /> Some other objectives of the economic plan for that period were providing for the minimum needs of the community through a rural works program and the removal of the privy purses of the nobility.{{sfn|Malik|1988|pp=60–72}} Those and many other goals of the 1967 programme were accomplished by 1974–1975. Nevertheless, the success of the overall economic plan was tempered by the fact that annual growth at 3.3–3.4% over 1969–1974 fell short of the targeted figure.{{sfn|Malik|1988|pp=60–72}}