Indian Prime Minister Morarji Desai said yesterday that the failing effort in 1965 to place a plutonium fueled monitoring device on the Chinese border "was decided by both the Indian and the American governments at the highest levels."

Disclosure of the attempt, which resulted in loss of the monitoring device during a Himalayan avalanche. came in the American magazine Outside last Wednesday. The next day, the Indian Foreign Ministry called in U.S. Ambassador Robert Goheen and demanded an explanation.

Desai said yesterday that subsequent checks showed that previous Indian governments had been fully involved in the 1965 and later expeditions and that repeated investigations showed "no cause for alarm on grounds of health or environmental health."

The Outside article had raised the possibility that the nearly three pounds of plutonium 238 isotope could poison the headwaters of the sacred Ganges River. The magazine also said planting of the device was carried out by the CIA and its Indian counterpart.

Desai said, however, that there was no point in blaming the agencies since the political authorities were involved. Desai himself was deputy prime minister when a second missile-monitoring capsule was placed on a Himalayan peak in 1967 and recovered a year later.

"I can recall the critical situation [with China] with which we were faced in those days. The dangers of doing this were considered and it was decided by both parties that the steps were warranted. When people are afraid they do such things," he said.