In 1969, the open conflict between the Syndicate and Indira Gandhi became apparent. The death of President Zakir Hussain that year led to a vacancy in the position of President of India. Despite Mrs. Gandhi's reservations, the 'Syndicate' successfully put forth her enduring adversary and the then-Speaker of the Lok Sabha as the official Congress nominee for the upcoming Presidential elections.

Which of the following decision taken by Indira Gandhi led to the resignation of Morarji Desai (then Deputy Prime Minister and Finance Minister) from the government?

Both options 1 and 2

The correct answer is option 3: Both options 1 and 2.

Option 1- Her decision to nationalize fourteen leading private banks.
Option 2- Her decision to abolish the ‘privy purse’.
Option 3- Both options 1 and 2
Option 4- Neither 1 nor 2.

NCERT Text " The factional rivalry between the Syndicate and Indira Gandhi came in the open in 1969. Following President Zakir Hussain’s death, the post of President of the India fell vacant that year. Despite Mrs Gandhi’s reservations the ‘syndicate’ managed to nominate her long time opponent and then speaker of the Lok Sabha, N. Sanjeeva Reddy, as the official Congress candidate for the ensuing Presidential elections. Indira Gandhi retaliated by encouraging the then Vice-President, V.V. Giri, to file his nomination as an independent candidate. She also announced several big and popular policy measures like the nationalisation of fourteen leading private banks and the abolition of the ‘privy purse’ or the special privileges given to former princes. Morarji Desai was the Deputy Prime Minister and Finance Minister. On both the above issues serious differences emerged between him and the Prime Minister resulting in Desai leaving the government."