The 1961 elections were a bitter contest between the PPP, the PNC, and the United Force (UF), a conservative party representing big business, the Roman Catholic Church, and Amerindian, Chinese, and Portuguese voters. These elections were held under yet another new constitution that marked a return to the degree of self-government that existed briefly in 1953. It introduced a bicameral system boasting a wholly elected thirty-five-member Legislative Assembly and a thirteen-member Senate to be appointed by the governor. The post of prime minister was created and was to be filled by the majority party in the Legislative Assembly. With the strong support of the Indo-Guyanese population, the PPP again won by a substantial margin, gaining twenty seats in the Legislative Assembly, compared to eleven seats for the PNC and four for the UF. Jagan was named prime minister.

Jagan's administration became increasingly friendly with communist and leftist regimes; for instance, Jagan refused to observe the United States embargo on communist Cuba. After discussions between Jagan and Cuban revolutionary Ernesto ""Che"" Guevara in 1960 and 1961, Cuba offered British Guiana loans and equipment. In addition, the Jagan administration signed trade agreements with Hungary and the German Democratic Republic (East Germany).

From 1961 to 1964, Jagan was confronted with a destabilization campaign conducted by the PNC and UF. Riots and demonstrations against the PPP administration were frequent, and during disturbances in 1962 and 1963 mobs destroyed part of Georgetown.

Labor violence also increased during the early 1960s. To counter the MPCA with its link to Burnham, the PPP formed the Guianese Agricultural Workers Union. This new union's political mandate was to organize the Indo-Guyanese sugarcane field-workers. The MPCA immediately responded with a one-day strike to emphasize its continued control over the sugar workers.

The PPP government responded to the strike in March 1964 by publishing a new Labour Relations Bill almost identical to the 1953 legislation that had resulted in British intervention. Regarded as a power play for control over a key labor sector, introduction of the proposed law prompted protests and rallies throughout the capital. Riots broke out on April 5; they were followed on April 18 by a general strike. By May 9, the governor was compelled to declare a state of emergency. Nevertheless, the strike and violence continued until July 7, when the Labour Relations Bill was allowed to lapse without being enacted. To bring an end to the disorder, the government agreed to consult with union representatives before introducing similar bills. These disturbances exacerbated tension and animosity between the two major ethnic communities and made a reconciliation between Jagan and Burnham an impossibility.

Jagan's term had not yet ended when another round of labor unrest rocked the colony. The pro-PPP GIWU, which had become an umbrella group of all labor organizations, called on sugar workers to strike in January 1964. To dramatize their case, Jagan led a march by sugar workers from the interior to Georgetown. This demonstration ignited outbursts of violence that soon escalated beyond the control of the authorities. On May 22, the governor finally declared another state of emergency. The situation continued to worsen, and in June the governor assumed full powers, rushed in British troops to restore order, and proclaimed a moratorium on all political activity. By the end of the turmoil, 160 people were dead and more than 1,000 homes had been destroyed.

In an effort to quell the turmoil, the country's political parties asked the British goverment to modify the constitution to provide for more proportional representation. The colonial secretary proposed a fifty-three member unicameral legislature. Despite opposition from the ruling PPP, all reforms were implemented and new elections set for October 1964.

As Jagan feared, the PPP lost the general elections of 1964. The politics of apan jhaat, Hindi for ""vote for your own kind,"" were becoming entrenched in Guyana. The PPP won 46 percent of the vote and twenty-four seats, which made it the majority party. However, the PNC, which won 40 percent of the vote and twenty-two seats, and the UF, which won 11 percent of the vote and seven seats, formed a coalition. The socialist PNC and unabashedly capitalist UF had joined forces to keep the PPP out of office for another term. Jagan called the election fraudulent and refused to resign as prime minister. The constitution was amended to allow the governor to remove Jagan from office. Burnham became prime minister on December 14, 1964.

Data as of January 1992