Q18.Under what circumstances can the Financial Emergency be proclaimed by the President of India? What consequences follow when such a declaration remains in force?

Article 360 of the Indian Constitution empowers the President to proclaim a Financial Emergency.

Circumstances for Proclamation

This can be done if the President is satisfied that India's financial stability or credit, or that of any part of its territory, is threatened.

Parliamentary Approval

The proclamation requires approval by both Houses of Parliament within two months by a simple majority.

Consequences of Financial Emergency

When in force, the Union can direct states on financial propriety, including reducing state government employees' salaries and allowances. The President can also direct a reduction in salaries of Union employees, including Supreme Court and High Court judges. All state money bills or financial bills can be reserved for the President's consideration.

Revocation

Once approved, it remains in force indefinitely until revoked by the President, with no maximum period prescribed.

Though never invoked, Article 360 is a crucial constitutional safeguard against severe financial crises.