Maruti scam: Indira Gandhi let her younger scion Sanjay float a car company that didn’t make a single vehicle in 7 years


Sanjay Gandhi, the younger scion of Indira Gandhi, had a big penchant for cars. After a three-year internship with Rolls Royce in India, when Sanjay came back to India in 1968, he told his queen mother about a dream to make cars.

Mrs Gandhi, who was extremely fond of her younger son, nodded, and in 1970, the PM’s cabinet suggested bringing out a cheap ‘people’s car’, something that was affordable, efficient, and importantly, made in India.


Sanjay had no blueprint of a running car model, but he being the uncrowned prince, elicited an exclusive production license from his mother’s regime. Soon, Maruti Motors Limited was formed, and in 1971, Sanjay assumed the role of the company’s managing director. But Maruti had neither any design to work on, nor any tie-up with any car manufacturer.

So next, Sanjay produced a car prototype. He made the chassis at a workshop near Delhi’s Gulabi Bagh, an area frequented by truckers.  The machine contained miscellaneous parts sourced from different places: few parts from the Jama Masjid area, a motorcycle engine to run the car. After a few more additions, the car was run in Ahmednagar, but it failed the test.


Nonetheless Indira Gandhi, like a proud parent, showcased the botched up prototype as the model of success. But her attempt to hogwash was booed by the public. Soon, a small army of Sanjay started looking around for land.

Haryana’s chief minister, Bansi Lal, not wanting to anger Mrs Gandhi, gave away farm land to Maruti in dirt cheap rates. In the meanwhile, Sanjay contacted Volkswagen for a possible tie-up to jointly manufacture the Beetle in India. But the talks fell flat.

In 1974, when Emergency was declared in India, Sanjay Gandhi assuming the unofficial role of the PM’s chief advisor, used his political clout to coerce banks and investors to put money in his venture. Reluctant investors and bank personnel were arrested and put behind bars on bogus charges. The same year, the Congress government granted Maruti an industrial licence to produce 50,000 cars.

An executive who worked for one of the Singhania companies was arrested under the dreaded Maintenance of Internal Security Act in November 1975 and later his detention was continued under the Conservation of Foreign Exchange and Prevention of Smuggling Act. A detention order against one of the Singhanias was also issued under MISA.


 The day businesses affiliated to the Singhania family started buying Maruti shares, the executive and the family member were let go. Another dealer who demanded his deposit back because no cars were made was arrested under and imprisoned for two months.

Not a single car was produced by Maruti since its inception in 1971. When Indira Gandhi lost the general elections in 1977, the Opposition, led by the Janata Dal, liquidated the car company.


Maruti sat duck till Sanjay’s death in a plane crash in 1980. Indira Gandhi, who had regained her PM post by then, after a discussion with Arun Nehru, decided to get professional expertise to give wings to deceased son’s dreams.

After much research and visits, Indira’s men brought in Japanese motor maker Suzuki that trimmed Sanjay’s prototype and built a car meant for the Indian roads. And Maruti 800 finally rolled out into the roads in 1983.



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