Emergency Provisions - Financial Emergency

Financial Emergency

• Article 360 empowers the president to proclaim a Financial Emergency.
• It arises under situation when the financial stability or credit of India or any part of its territory is threatened.
• A proclamation declaring financial emergency must be approved by both the Houses of Parliament within two months from the date of its issue.
• Once approved by both the Houses of Parliament, the Financial Emergency continues indefinitely till it is revoked.
• A resolution approving the proclamation of financial emergency can be passed by either House of Parliament only by a simple majority.
• A proclamation of Financial Emergency may be revoked by the president at anytime by a subsequent proclamation. Such a proclamation does not require the parliamentary approval.

Effects of Financial Emergency

• The executive authority of the Centre extends to directions as the President may deem necessary and adequate for the purpose.
• Any such direction may include a provision requiring the reduction of salaries and allowances of all or any class of persons serving in the state; and the reservation of all money bills or other financial bills for the consideration of the President.
• The President may issue directions for the reduction of salaries and allowances of all or any class of persons serving the Union; and the judges of the Supreme Court and the high court.