What was going on when I was born?

The winners and their work, page B4. By PETER KIHSS The comic novel ''A Confederacy of Dunces,'' whose author, John Kennedy Toole, committed suicide 12 years ago after failing to find a publisher, won the 1981 Pulitzer Prize for fiction yesterday. The drama prize was awarded to ''Crimes of the Heart,'' by Beth Henley, a play performed so far only at regional theaters and Off Broadway. In journalism, two prizes went to staff members of The New York Times - John M. Crewdson, for national reporting on immigration problems and illegal aliens, and Dave Anderson, sports columnist, for commentary.

The Voyage of Columbia Two astronauts cruised through a second day in space aboard the Columbia, enjoying the panoramas and putting the smooth-flying craft through critical tests in preparation for a planned landing early this afternoon in California's Mojave Desert. The wheeled landing is to follow 36 orbits in a journey of 54 1/2 hours. (Page A1, Column 6.) The loss of all or part of 17 tiles that protect the space shuttle from the extreme heat of re-entry into the earth's atmosphere was a subject of debate. Space officials said attempts to photograph the underside of the craft had failed, but they expressed confidence that all the critical tiles were firmly in place and posed no hazard. (C6:1-2.)

The Reagan Administration, buffeted by a surprising Congressional setback last week while the President was recuperating from a gunshot wound, is gearing up now to try to recapture its political momentum when Congress returns in two weeks. Congressional Republicans and White House officials admit that an unexpected defeat on the budget resolution in the Senate Budget Committee last week dealt them a blow, but they assert that the pressure of the legislative timetable will be on Congress to produce action on budget resolutions by May 1. To regain the offensive for that period, White House strategists have invited nearly 900 regional editors and broadcasters here for economic briefings, lined up an intensive speaking schedule for Vice President Bush, encouraged Cabinet members to redouble their public appearances and laid plans to lobby three Republican Senators who voted against the budget resolution last week. Hope for Personal Campaigning Republican leaders in Congress hope that President Reagan will be well enough in two weeks to do some personal politicking for his program with members of Congress, although his own staff is cautious about committing him to such activity until his doctors approve.

''The spaceship is just performing beautiful.'' - John W. Young. (A1:6.)

An official City Hall portrait of former Mayor Abraham D. Beame was unveiled yesterday in an atmosphere of affection, jokes and a few moments of deep emotion. Officials from Mr. Beame's administration, which he characterized as ''undoubtedly the roughest in the history of the city,'' gathered in the Board of Estimate room at City Hall like veterans of some particularly tough battle to reminisce and to praise the old commander. About 200 of Mr. Beame's friends and fellow campaigners were present.

Premier Rene Levesque and his Parti Quebecois were elected tonight to a new term. About four million voters, who had rejected Quebec's separation from Canada in a referendum last year, turned around and gave Mr. Levesque a sweeping show of confidence in his ability to lead Quebec as a Canadian province. Parti Quebecois, which led from the start of the count shortly after the polls closed at 8 P.M., won 80 of the 122 seats at stake in the National Assembly against only 42 for the Liberal Party. In the outgoing assembly, which had 12 fewer seats, Parti Quebecois had 67 seats, the Liberals had 34, Union Nationale had 5, independents had 2 and 2 seats were vacant. In a northern Montreal sports arena, a huge crowd of Parti Quebecois supporters, who had watched the defeat of their independence dreams in tears 11 months ago, was deliriously happy tonight as the seats piled up for their party. Mr. Levesque has promised voters, however, that he will hold no new referendum on independence during a new term, although he did not rule out an election on the issue before the end of the legal five-year term.

President Reagan told his advisers to repudiate a report by Representative James R. Jones that the Administration would compromise on the tax cut portion of his economic program. President Rea@gan said ''that he had authorized no one in his Administration to offer legislative compromises on his program for economic recovery,'' a White House spokesman stated. (Page A1.) Retail sales rose one-tenth of 1 percent in March, to $86.94 billion, mainly because of gains in auto sales resulting from rebates, the Commerce Department said. The figure, consistent with some economists' predictions that the economy will slow soon, was considerably below February's newly revised increase of 1.6 percent, the report said. (D1.)

Retail sales leveled off in March and would have shown the first decline in 10 months had it not been for auto sales, which were lifted by rebates, the Commerce Department reported today. The new figures were consistent with some economists' predictions of an economic slowdown in the next few months. Preliminary statistics for March sales showed them rising a bare one-tenth of 1 percent, to a seasonally adjusted total of $86.94 billion. The slight gain was the 10th consecutive monthly increase but was far below February's newly revised increase of 1.6 percent, the report said.

Sixty percent of the Mobil Corporation's applications for natural-gas stripper wells since 1978 have been withdrawn either because of errors or inadequate supporting information, according to a company filing made available today by the Federal Energy Regulatory Commission. Mobil's report provides some ammunition to industry critics who have maintained that the Government has been unable to properly enforce some of the pricing provisions of the National Gas Policy Act of 1978. The withdrawal of the applications for stripper-well status, which allows companies to collect higher prices than for other gas, and a company-imposed moratorium on new filings were said by Mobil to show that none of its errors was intentional.

Just before the end of 1978, the California Life Corporation announced that it expected a 24 percent profit rise for the year, to about $2.6 million. That rosy outlook was not shared, however, by outside auditors from Deloitte Haskins & Sells. Far from agreeing with Cal-Life, the Deloitte team said Cal-Life was ignoring certain costs in selling new policies and, thus, actually had lost about $3 million. The Deloitte view triumphed among members of Cal-Life's audit committee, and sweeping changes in the company's management and financial controls were undertaken. On May 12, 1979, Cal-Life's directors dismissed the company's chief executive, Harry H. Mitchell, and two aides, while allowing Mr. Mitchell to remain a director.

Columbia, in orbit, is not alone C6 Two former astronauts push cause of space in Congress C7 Excerpts of astronauts' conversa- tions with Mission Control C7 International Gun merchants thrive in Pakistan village near Afghan border A3 Chinese magazine tells of strikes and demonstrations A5 Communists parley cautioned on Poland A5 Around the World A7 Inquiry panel on London rioting set up as violence ebbs A8 Chinese workers laud virtues of market-oriented economy A9 Government/Politics N.A.A.C.P. calls Reagan budget cuts damaging to poor A16 Tax forms of President and Mrs. Reagan are made public A20 Jersey gubernatorial candidates to spend $4 million on TV ads B1 Former Mayor Beame's official City Hall portrait is unveiled B1 Ex-U.S. aide testifies for Williams in Abscam trial B2 U.S. allows New York State to re- lease Medicaid funds B4 Nassau's Republican leader begins defense in his fraud trial B10 Alabama utility to award back pay in job bias case B12 Industry/Labor Short Line bus strike forces com- muters to other transportation B3 Obituaries General Bradley's remains flown to capital for funeral B18 Howard Thurman, black clergy- man and educator B18 Caroline Gordon, novelist, short- story writer and critic B18 Science Times Progress in the "War on Cancer" has been significant C1 Scientists near an understanding of birth of cancer cell C1 Recent gains in cancer treatment C2 Education: The pyramid question lives C3 Fakery: Its a pity C3 About Education: high school, grand dreams have faded C4 Science Watch C4 Science Q&A C4 General Around the Nation A10 Agnew go-between will testify against him in $200,000 suit A11 Doctors gain in efforts to keep peer review program A17 Elite blacks recall segregated life in Washington, D.C. A24 After 21 months, driver still seeks his $1.95 for gas B2 The Region B2 Many students have yet to pass test for high school diploma B3 Sketches of the new Pulitzer win- ners B4 3 held in slaying of New York de- tective's daughter B3 The City B8 Alabama utility to award back pay in job bias case B12 It's business as usual at Dallas shop that sold gun to Hinckley B13 Arts/Entertainment "The Buddy System" opens at Circle in the Square C8 Independent agency weighed to replace arts Endowments C9 Kool-Jazz Festival-New York to open June 25 C9 Heiskell and Gregorian appointed Public Library heads C9 Leipzig's Gewandhaus Orchestra at Avery Fisher Hall C10 Nan Talese moves to Houghton Mifflin as senior editor C11 Stephen King's "Danse Macabre" is reviewed C11 "Crimes of the Heart," Pulitzer winner, a play of three sisters C13 Acting as a writer, Johnny Carson walks out on show C22 Style Notes on Fashion B19 How Paris kept position in fashion B19 Sports George Vecsey on the N.H.L., hockey's undisciplined child B14 Judge says Brenner has not proved a conspiracy B14 Blue Jays beat Yanks, 5-1 B15 Swan returns as Mets prepare for home opener today B15 Baker, Ranger rookie, a virtuoso as goaltender B15 Gretzky, 20, already regarded as one of best hockey players ever B15 Joe Louis: A stylist in and out of the ring B15 Grunfeld main asset of Kings against Suns B16 Carlton and Phillies beat Pirates, 5-1 B16 Features/Notes Notes on People B10 Going Out Guide C13 News Analysis Pranay Gupte assesses effects of latest fighting in Lebanon A2 Editorials/Letters/Op-Ed Editorials A22 The Reagan energy slogan The boatless people A modern hero America's average kind of day Letters A22 Tom Wicker: how to save billions by switching indexes A23 Jeffrey M. Puryear: Puerto Rico's waiting A23 Bill Archer: taxing Americans abroad A23 Vladimir Solovyov: the Cuban triangle A23

The astronauts of the space shuttle Columbia cruised through their second day in space today, enjoying the view and putting their smooth-flying spaceship through critical tests in preparation for their planned landing tomorrow on the desert in California. It is to be the first time that a spacecraft has attempted a return to earth, plunging through the atmosphere and gliding to a wheeled landing, so that it can be reflown - a capability that promises to make traveling to and from space a more routine experience. In a telecast from the Columbia shortly after 1 P.M., as the spaceship passed over the United States on its 21st orbit, John W. Young, the mission commander, reported, ''The spaceship is just performing beautiful.'' Bush Congratulates Crew Mr. Young and Capt. Robert L. Crippen of the Navy were speaking by radio in the telecast to Vice President Bush at the White House. Mr. Bush congratulated the crew and declared: ''I think your trip is going to ignite the excitement and forwardthinking for this country.'' Flight controllers reported that they were ''extremely pleased'' with the mission's progress and continued to believe that the loss of thermal tiles in launching at 7 A.M. yesterday posed no problem for the re-entry maneuvers. The latest count is that 17 small heatshielding tiles were lost or damaged on the two pods that house the Columbia's orbital manuevering rockets. The vehicle is coated by nearly 31,000 tiles. (Page C6.)