Model Question and Answers for APSC | Under what circumstances financial emergency can be imposed as per article 360 of the India Constitution? (APSC 2006)

Model Question and Answers for APSC | Under what circumstances financial emergency can be imposed as per article 360 of the India Constitution? (APSC 2006)

Ans : If the President is satisfied that a situation has arisen whereby the financial stability or credit of India or of any part of the territory thereof is threatened, he may by a Proclamation make a declaration to that effect. The authority to impose such an emergency is with the President only. However, this does not exempt the resident’s power from judicial review.
Within two months of its issuance, a declaration of financial emergency must be approved by a simple majority in both the Houses of Parliament ie. Lok Sabha and Rajya Sabha. If the Lok Sabha is dissolved, the Rajya Sabha may approve it, but the Lok Sabha must approve it within 30 days after its reconstitution.
Once the declaration is approved by both the Houses it lasts indefinitely (no maximum period) without the need for further legislative approvals. This proclamation may also be revoked by the president at any time without the consent of parliament. The Implications of the Financial Emergency:
1. The Union gets the power to give financial orders to the states based on its own policies.
2. The President may order the States to limit the salary, and allowances of government employees.

3. Money bills and other financial bills can be reserved, that come up for review by the President after passing through the state legislature.
4. The President has the authority to order the reduction of the salaries and allowances of the Central Government employees, including the Supreme Court and High Court judges.
Financial Emergency has never been imposed in India till date.