Why did Indira Gandhi lift the Emergency?

Question

Indira Gandhi imposed a state of emergency (known as The Emergency) on 25 June 1975 which was withdrawn abruptly on 21 March 1977. Why was it lifted?

Writes R.Guha about the withdrawal in India after Gandhi:

On 18 January 1977, Prime Minister announced that the Parliament be dissolved and fresh elections held. This came as a surprise to her political opponents, who were let out of their cells even as the announcement was being made on All-India Radio. And, from all accounts, it came as a shock to Sanjay, who too had not been informed before hand. The term of the present Parliament could have been extended, year after year. The underground resistance had been fully tamed. And yet Mrs Gandhi decided, suddenly and without consulting anyone, to return India to democracy.

Answer 1

The same book 'India after Gandhi' mentions various possible reason for lifting democracy. Though the real reason may remain unknown, I will list the possible reasons:

1. It is said that her intelligence chief had assured her that the Congress would be re-elected with a comfortable majority. Isolated from public opinion, she was unaware of the extent to which her rule had become unpopular. By winning the election she hoped to vindicate the Emergency and also clear the way for Sanjay Gandhi to succeed her.
2. Some feel that it was the consequence of competitive one-upmanship. President Bhutto had just announced elections in his usually autocratic Pakistan; so Mrs. Gandhi couldn't delay elections in her unnaturally autocratic India?
3. Mary C. Carras, her biographer, has argued that throughout her life her self-image had been that of a democrat. Indeed, her self-respect derives in good part from this self-image. She was compelled to prove to the world and, above all, to herself, that she is and always has been a democrat.’ In the opinion of some other writers once Mrs Gandhi became aware of the Emergency excesses and realized that matters were getting out of her control, she decided to get out of this trap by holding elections even if it meant losing power.
4. Her secretary, writing long after the event, offered yet another explanation. The emergency, he noted, had cut Mrs. Gandhi off from the public contact that previously nourished her. ‘She was nostalgic about the way people reacted to her in the 1971 campaign and she longed to hear again the applause of the multitudes.'
5. Then there was international criticism. She was strongly condemned by the former German chancellor Willy Brandt and the Socialist International, by the World Council of Churches in Geneva and by the leading American trade union organization. There was also impersonal yet very public criticism, offered in newspapers.

Perhaps all these factors contributed to the final decision to uplift emergency.