What was one of the first decisions made by the Indira Gandhi government to address economic challenges in 1967?

Devaluation of the Indian rupee

In the years preceding the fourth general elections, the nation experienced significant transformations. The swift succession of two Prime Ministers' deaths and the appointment of a relatively inexperienced new Prime Minister, perceived as a political newcomer, marked this period. As mentioned in Chapter Three and the previous section of this chapter, this era was characterized by severe economic challenges stemming from consecutive monsoon failures, extensive droughts, decreased agricultural output, acute food scarcity, depletion of foreign exchange reserves, a decline in industrial production and exports, coupled with a notable increase in military expenditures and a diversion of resources from developmental planning and economic progress.

Among the initial actions taken by the Indira Gandhi administration was the devaluation of the Indian rupee, influenced by perceived pressure from the United States. Previously, the Indian rupee could buy less than one US dollar; however, post-devaluation, its cost exceeded Rs. 7.