♤ A combination of recession, growing unemployment rampant inflation and scarcity of food grains created a serious economic crisis.

♤ India’s support to liberation of Bangladesh, materiallyhad serious repercussions for India's foreign as these exchange reserves drained and more resources were diverted to defence.

♤ Consecutive monsoon failure in 1972 & 73 affected India food grains availability and fuelled price rise.

♤ Large scale unemployment and economic recession led to industrial unrest and wave of strikes in different parts of country culminated in All India railway strike in May 1974.