After the announcement of “ceasefire” after four days of a conflict between India and Pakistan, which followed the dastardly attack by Pakistani terrorists at Pahalgam on 22 April 2025, I couldn’t help but notice some hypocritical and farcical positions being taken by left wing journalists and congress persons. It was quite apparent that they were conditioned (or indoctrinated) to basically hate Modi and any of his actions, and criticize the BJP led Government’s action, as if their life depended on that.
For instance, they were screaming for some punitive action on Pakistan in the immediate aftermath of the Pahalgam terror attack. Once India initiated diplomatic tightening and suspension of the Indus Water Treaty, they wanted a stronger response. Once India started pummelling Pakistan, first targeting the terror bases, and upon escalation, started targeting much more inside Pakistan, people started sending doves and pigeons in their twitter feeds, and how war is not the solution. Once the ceasefire was announced, they started comparing Modi with Indira to claim that Indira was a better leader.
Enough of has been said about the reactions of these hypocrites, and their twitter feed and their own utterances stand testimony to their lunacy. But the farcical comparison of Modi with Indira is a baseless attempt to glorify Indira Gandhi, when the reality is entirely different.
The Genesis Behind Initiation Of War
I am a firm believer of the fact that an individual can be a political animal, with his own personal biases and preferences. He can act emotional; his actions can be irrational influenced by his anger and biases. But an institution has to be emotionless. An institution like the Government should be calm, rational and do what is best for the country. The euphoria or anxiety or anger of the masses for an immediate war cannot be the reason for any Government to declare war. India’s action after the Pahalgam is a case study in mature handling of the situation.
The decision to initiate a war is one of the gravest things a nation can make, carrying profound consequences for its people, economy, and global standing. Wars are rarely spontaneous; they demand meticulous evaluation of multiple factors to ensure that the costs—human, economic, and political—are justified by the objectives. Factors that must be considered before initiating a war include diplomatic, economic, socio-political, military, ethical, and long-term strategic considerations.
Lack of foresight would lead to catastrophic miscalculations, such as those seen in the economic fallout of India’s 1971 Bangladesh Liberation War.
Effect of 1971 Bangladesh Liberation War
The war stands as a defining moment in India’s modern history, a testament to its military prowess, and one which led to the creation of Bangladesh, ending Pakistan’s brutal suppression of its eastern wing and securing India’s strategic dominance in South Asia. The war’s economic and socio-political aftermath, coupled with the controversial imposition of the Emergency in 1975, reveals a shortsightedness that cannot be ignored.
I have sought to examine the multifaceted impacts of the 1971 war, in the geopolitical triumph, it exacerbated India’s economic woes and set the stage for authoritarian measures, raising questions about the wisdom of prioritizing military victories without adequate preparation for their consequences.
The Headline Numbers
For the uninitiated, the most glaring evidence of economic impact of the war are two numbers – (a) Inflation rate which went up to 28% in 1974 and (b) India’s economic growth rate i.e. GDP Growth Rate that plummeted to 1.16%. These are head-rolling numbers, but then the only heads that rolled then was that of the general public.
The Economic Fallout: A Nation in Tatters
The war’s economic consequences were catastrophic, undermining the narrative of unalloyed triumph. India’s economy, already strained by chronic poverty and dependence on agriculture, was ill-equipped to handle the war’s burdens. The influx of 10 million refugees from East Pakistan strained India’s resources, with estimates suggesting a cost of $700 million (equivalent to $4.5 billion today) to feed and shelter them (Sisson & Rose, 1990).
War-related expenditures, including military mobilization and support for the Mukti Bahini, further drained the treasury. According to the World Bank, India’s GDP growth plummeted from 5.2% in 1970 to 1.6% in 1971, barely keeping pace with population growth (World Bank, 2025).
The global context exacerbated the crisis. The 1973 OPEC oil shock quadrupled oil prices, hitting India’s import-dependent economy hard. Inflation soared to 16.94% in 1973 and peaked at 28.60% in 1974 (MacroTrends, 2025). Food prices skyrocketed due to war-disrupted agriculture, compounded by droughts in 1972–73. Government’s fiscal deficit ballooned, and foreign exchange reserves dwindled, forcing India to rely on loans from the International Monetary Fund and Soviet aid (Joshi & Little, 1994). These economic woes persisted, with inflation averaging 7–8% through the late 1970s and early 1980s, eroding living standards for millions.
Gandhi’s policies, such as nationalization of banks (1969) and coal mines (1973), aimed to assert state control but failed to address structural inefficiencies. Her government’s focus on populist measures, like the “Garibi Hatao” (Remove Poverty) slogan, did little to mitigate the crisis, as public investment stagnated and industrial growth slowed (Guha, 2007). The war’s economic toll thus exposed the fragility of India’s economic framework, a consequence of prioritizing military victory without a robust plan for post-war recovery.
Refugee Crisis and Additional Fiscal Strain
The influx of approximately 10 million refugees from East Pakistan placed an enormous burden on India’s economy. The cost of supporting these refugees was estimated at around $480 million in FY 1971, with about $200 million covered by foreign grants and the remainder by the Indian government. None of these was either anticipated or were within India’s limited resources. Cost of this unchecked refugee influx has been borne by India till date. The root for all the troubles and entire agitation in Assam can be traced to this. We, as a country, were hit economically and demographically by large amounts of unchecked refugee influx.
The Emergency: Economic Distress as a Pretext for Authoritarianism
The economic fallout of 1971 set the stage for one of the darkest chapters in India’s democratic history: the Emergency (1975–1977). On June 25, 1975, Gandhi declared a state of emergency, citing “internal disturbances” and economic instability as justifications. Officially, the Emergency was meant to address inflation, hoarding, and black-marketeering. However, this narrative has few buyers.
The Emergency suspended civil liberties, jailed thousands of opposition leaders, censored the press, and centralized power in an unprecedented manner, drawing comparisons to modern fascism (Dhar, 2000). The economic distress post-1971 provided a convenient pretext. Gandhi’s invocation of economic woes was a smokescreen for consolidating power.
The Emergency thus underscores the war’s long-term socio-political costs: economic distress fueled public unrest, which Gandhi exploited to justify authoritarian measures, tarnishing her democratic credentials.
The Shortsightedness of War: A Broader Perspective
Celebrating the 1971 war to ridicule Modi ignores the broader implications of Gandhi’s decision to prioritize military action without adequate preparation for its diplomatic, economic, and socio-political ramifications. War should not be an exercise in ego satisfaction or a tool to project power; it demands careful consideration of long-term impacts.
Gandhi’s diplomatic efforts, while successful in securing Soviet support, failed to anticipate the hostility of the U.S., which deployed the USS Enterprise to the Bay of Bengal, signaling a Cold War rift (Raghavan, 2013). Economically, the war’s costs were not offset by contingency plans, leaving India vulnerable to global shocks like the oil crisis. Socio-politically, the war’s fallout contributed to unrest that Gandhi used to justify the Emergency, undermining India’s democratic fabric.
Gandhi’s war, though a humanitarian necessity, was a gamble that prioritized short-term triumph over long-term stability. The economic tatters of the 1970s and the Emergency’s authoritarian legacy highlight the perils of such shortsightedness.
The 1971 Bangladesh Liberation War, though a moment of glory for India and Indira Gandhi, its economic and socio-political costs reveal a critical oversight in her leadership. The war exacerbated India’s economic fragility, contributing to inflation, deficits, and public discontent, which Gandhi later used to justify the Emergency—a move that remains a stain on her legacy.
Celebrating 1971 to score political points against Modi obscures these complexities, reducing a nuanced historical event to a simplistic narrative. War demands not just courage but foresight, and Gandhi’s failure to balance the two serves as a cautionary tale for leaders today.
References:
- Dhar, P. N. (2000). Indira Gandhi, the “Emergency,” and Indian Democracy. Oxford University Press
- MacroTrends. (2025). India Inflation Rate 1960–2025.
- Raghavan, S. (2013). 1971: A Global History of the Creation of Bangladesh. Harvard University Press
- World Bank. (2025). India GDP Growth (Annual %)
G Saimukundhan is a Chartered Accountant.
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