What was the key reason for Morarji Desai's departure from the union government in 1969-70?

Disagreements with the Prime Minister on policy matters.

The clash of factions between the Syndicate and Indira Gandhi was brought into the public eye in 1969. The passing of President Zakir Hussain that year left the position of India's President vacant. Despite Mrs. Gandhi's reservations, the 'syndicate' successfully nominated N. Sanjeeva Reddy, her long-standing adversary and the then Speaker of the Lok Sabha, as the official Congress candidate for the upcoming Presidential elections. In response, Indira Gandhi launched her countermove by urging the Vice-President at the time, V.V. Giri, to stand as an independent candidate. She also introduced several notable and popular policy initiatives, such as the nationalization of fourteen prominent private banks and the elimination of the 'privy purse,' which entailed special privileges granted to former princes.

In the midst of these developments, Morarji Desai held the positions of Deputy Prime Minister and Finance Minister. Serious disagreements arose between him and the Prime Minister on both of the aforementioned issues, leading to Desai's departure from the government.