India was reeling under an economic downturn after the 1965 War with Pakistan. There had been a shift of developmental expenses to defence expenditure. There had been rising inflation of essential items and slow growth in jobs. The Congress had won the Election under the slogan of garibi hatao (remove poverty). Subsequently, the Bangladesh crisis had put a heavy strain on India’s economy. Apart from this, the U.S. government had stopped all aid to India and international price oil had increased quickly during the period. This led to an increase in inflation whereby the prices increased by 23 per cent in 1973 and 30 per cent in 1974. Industrial growth was low that caused unemployment to rise. The government froze the salaries of its employees to decrease its expenditure. The food grain production had declined due to a bad monsoon in 1972- 73. These conditions led to the unrest among students and government employees in various parts of India.