The Swatantra Party was formed in August 1959 after the Nagpur resolution of the Congress which called for land ceiling, takeover of food grain trade by the state and j adoption of cooperative farming. The party was led by old Congress leaders like C. Rajagopalachari, K.M. Munshi, N.G. Ranga and Minoo Masani. The party stood out from the other in terms of its position on economic issues.
The Swatantra Party wanted the government to be less and less involved in controlling the economy. It believed that prosperity could come only through individual freedom. It was critical of the development strategy of state intervention in the economy, centralised planning, nationalisation and the public sector. It instead favoured expansion of a free private sector.
The Swatantra Party was against land ceilings in agriculture, and opposed cooperative farming and state trading. It was also opposed to the progressive tax regime and demanded dismantling of the licensing regime. It was critical of the policy of non-alignment and maintaining friendly relations with the Soviet Union and advocated closer ties with the US. The Swatantra Party gained strength in different parts of the country by way of merger with numerous regional parties and interests. It attracted the landlords and princes who wanted to protect their land and status that was being threatened by the land reforms legislation. The industrialists and business class who were against nationalisation and the licensing policies also supported the party. Its narrow social base and the lack of dedicated cadre of party members did not allow it to build a strong organisational network.