LET CREDIT be given where it's due: Indira Gandhi, harshly criticized here and elsewhere for ending the practice (however flawed) of democracy in India 19 months ago, has begun to reverse course. True, the emergency legislation she invoked to justify her assumption of dictatorial powers remains available for her use. The large increments that she added to executive power in the emergency period are firmly imbedded in law. The political opposition lacks unity and vigor.But she has released thousands of political prisoners - though far from all. She has suspended censorship of the domestic press. She has called new parliamentary elections for next March. Most observers expect her to win handily. If she had any doubt about the outcome, they believe, she would not have taken this new turn. It is indisputable, nonetheless, that there is again a legal and vocal opposition. For the moment, India is displaying more democracy than all but a handful of nations in the world.

What happened to give the imperial Mrs. Gandhi the confidence to permit this step back from personal dictatorship? Even her bitterest foes concede that, with a particular large exception, she used the months of emergency to instill a measure of discipline and service that had been painfully lacking in both the bureaucracy and the upper classes. India is not suddenly Sweden, and the luck of a record harvest cannot be denied. But the rate of inflation has been reduced, exports have risen, certain types of corruption have been attacked, and small but perceptible benefits have flowed to the millions in the villages. Firm leadership has had its fruits. The particular exception, of course, is the power and favor she has lavished upon her son, 30-year-old Sanjay. He is now regarded as her heir apparent, although whether he would interrupt his personal profiteering long enough to run the government remains in some doubt.

It is no doubt a coincidence that Mrs. Gandhi makes her move just as an American President comes to office declaring that "our moral sense dictates a clearcut preference for those societies which share with us an abiding respect for individual human rights." Direct American aid to India is not that important anymore; it's a political irritant anyway. But India is a major recipient of aid from the international banks in which Washington plays a large role. We are not inclined, however, to peer too closely at Mrs. Gandhi's timing. If it suits her purposes, and India's, to end at least temporarily the worst features of the repression she installed in 1975, then Americans should wish her well and encourage her to keep moving down the democratic road.