The Deputy Prime Minister, Mr. Morarji Desai, resigned in protest from the Central Cabinet to-day [July 16, New Delhi], when the Prime Minister, Mrs. Indira Gandhi, relieved him of the Finance portfolio and herself took it over in a surprise political move to hit back at the party bosses and reassert her supremacy in the wake of her latest set-back in the Congress Parliamentary Board over presidential candidature. This precipitate action by the Prime Minister has confronted the country with the most serious political crisis since Independence — with the Congress leadership at the Centre now so irrevocably divided and the ruling party clearly heading towards an internal trial of strength before Parliament meets on Monday [July 21]. Though Mrs. Gandhi has requested him to continue as Deputy Prime Minister with any portfolio other than Finance, Mr. Desai felt that his self-respect demanded that he should resign immediately to vindicate his position — and presumably fight it out in the Congress Parliamentary Party. But she was not accepting his resignation in haste.
