In 1973-74, India had emerged from the ‘Bangladesh War’ against Pakistan and providing succour to as many as 5 million refugees from the then East Pakistan for almost a year. Both the cost of the war and the refugee effort had put a huge burden on India’s economy — roughly around Rs 500 crore each at 1971-72 prices. As if these two events were not enough, India was hit by the first global oil crisis in August 1973, when international prices suddenly rose from $ 15 a barrel to $ 40 a barrel. Inflation shot up. Then, the monsoon of 1973 failed and we had a huge drought plus a food shortage on our hands. The Soviet Union loaned us 4 million tons of wheat. ‘Artificial rain-makers’ descended on the country and tried to sell us ‘pup’ technologies at huge prices. Fortunately our meteorologists did not fall for such sales pitches.
It was against this background that Prime Minister Indira Gandhi launched a massive austerity drive. She started by symbolically giving up her Dodge car and using an Ambassador (keeping the same ‘2800’ number plate). All ministers and Congress leaders were required to travel by economy class flights both at home and abroad. Not only were their salaries cut, but their perquisites — where the real expenditures were (and remain) — were cut by half. She herself took a 70 per cent cut. MPs, MLAs and chief ministers had to do likewise.
All ministerial and secretarial conferences both at home and abroad were cancelled. All repairs/extensions to government houses were frozen. All overseas visits were stopped except those cleared by Mrs Gandhi on a case by case basis. For her part, she cancelled all her foreign visits even to Non-Aligned Movement (Nam) and Commonwealth summits as well as annual prime ministerial visits to the United Nations General Assembly sessions.
There was not a murmur from anyone. People at large realised that these measures weren’t gimmicks. Mrs Gandhi meant them and they knew she was concerned about how people, especially the poor, were suffering. It made a difference to see the elite cutting down on their lifestyles and incomes, making people face rising inflation, dying crops and water shortage with resoluteness.
Mrs Gandhi travelled across the country by train to console and inform them in public meetings of what her government was doing to alleviate hardships. Meanwhile, many of her key ministers and officers designed and implemented massive holistic sets of economic programmes working 18–20 hours a day. They were not only steering the largest austerity programme in the country but also kickstarting the largest alleviation programme in India’s history.
As a result of this multi-pronged ‘attack’, starvation deaths shrunk drastically, the condition of the poor improved, inflation came down with food prices crashing down, and the economy somewhat improved. Moreover, the people’s faces brightened with hope writ large on them.
Today’s government must follow Mrs Gandhi’s hugely successful austerity drive and make the measures undertaken ‘bite’ wide and deep. Like in 1973-74, rural India is in deep crisis today and needs this government’s sustained help. And Indira Gandhi’s measures are the perfect model to pursue such an agenda.
Ashok Parthasarathi was the Science and Technology Advisor to Prime Minister Indira Gandhi