Indira Gandhi was the third Prime Minister of India; not counting Guljari Lal Nanda who succeeded Lal Bahadur Shastri as an interim prime minister for about a month or so. She was installed by the “Congress Syndicate” in 1966 as a malleable person as a permanent Prime minister till the impending fourth general elections of 1967. Some in the Syndicate ( Syndicate was led by Morarjee Desai and SK Patil among others) had even called her as a Goongi Gudia (mute doll). Indira was anything but that as she thumbed her nose at the Syndicate and split the Congress Party into Congress (I) and Congress (O). She went on to win the election in 1967 and emerged as an undisputed leader of the Party and the country.
From an economic perspective she was an unmitigated disaster for India. She was a populist and demagogue. She totally nationalized the financial sector. She was outright hostile to the private sector and the entrepreneurs. She perfected the license-permit-quota Raj and tightly controlled the private sector. Her Monopoly and Restricted Trade Practices (MRTP) law brought crippled the industry. Under this law any company any company doing 2 Crore in revenue was presumed to be a monopoly and was brought under the purview of the law and was not allowed to expand without the explicit government permission. Foreign Exchange Regulation Act (FERA) brought all the foreign trade under the government control. Marginal tax rates soared to 95%! I could go on and on here. Economy suffered immensely as a result.
Mrs. Gandhi got lucky on the political front when the Pakistan civil war broke out in 1971 and India helped liberate Bangladesh. After an outright victory over Pakistan, she became hugely popular and called an early elections in 1971 and won with a landslide. Her populist slogan of “Garibi Hatao” set the tone her remaining years. This election victory also got the “India is Indira and Indira is India” era going. Indian economy totally stalled; Jayaprakash Narayan led a nationwide agitation against her government which led to her imposing a “National Emergency”, suspending civil liberties in India. Voters punished her big time in 1977 elections, which were held one year late. Mrs. Gandhi and her son Sanjay Gandhi both lost their seats. Janata Party, consisting of Congress (O), Bhartia Jan Sangh and handful of motely other parties, formed the first non-Congress government in India.
Economically Janata was indistinguishable from Congress (I). Party was very hastily formed for elections and was incoherent in its ideology. It was just not able to govern. It collapsed under its own weight, paving the way for the election of 1980 which Mrs. Gandhi won again with a landslide. She continued her failed economic policies for remaining of her tenure. She played dirty politics in Punjab, Haryana and Andhra and paid the ultimate price when She was killed by her Sikh body guard in 1984.
I rate her the second worst prime minister of India, just ahead of Man Mohan Singh and rate her two on a scale of 1 to 10. Her 15 years as the prime minister were mostly lost years as far as the economy was concerned.