About Financial Emergency - Article 360 of the Indian Constitution
Article 360 of the Indian Constitution addresses financial emergency provisions. This article gives the President the authority to declare a financial emergency in the country if there is a threat to India's financial stability or credit. When the President believes that a situation has emerged that jeopardises India's financial stability or credit, he or she may declare a state of financial emergency. To remain in effect, the proclamation must be ratified by both Houses of Parliament within two months.
The declaration of a financial emergency has far-reaching consequences. It gives the President the authority to issue directives to the states requiring them to make such financial cuts as he or she deems necessary. The President may also be given the authority to cut the salary and allowances of Supreme Court and High Court judges.
After the proclamation becomes effective, the President has the authority to direct the Union government to withhold funds from the Consolidated Fund of India. He/she can also lower the President's, Vice-President's, and other officials' salaries and allowances. The declaration of financial emergency will expire after two months unless it has been ratified by resolutions of both Houses of Parliament before then. The President has the authority to withdraw the declaration of financial emergency at any time.
Parliamentary Approval and Duration of Financial Emergency
The Financial Emergency must get the consent of both Houses of Parliament before its declaration. Once approved by the House, the financial emergency will be in place for six months until extended by the Parliament. At this time, the government will have the authority to levy new taxes, reduce the size of the government, sell bonds to raise additional revenue, and take other measures to manage the fiscal position. The government may also seek the President's permission to extend the financial emergency beyond the initial six-month period. Both Houses of Parliament must approve the request, and the President must accede to it. The length of the financial emergency continues indefinitely for a period of time till it is revoked.
Revoking a Financial Emergency
A financial emergency can be revoked by the President of India at any time by issuing a subsequent proclamation. This proclamation does not require the approval of Parliament. In other words, the President has the sole authority to revoke a financial emergency. The President simply issues a proclamation stating that the emergency is revoked. The proclamation takes effect immediately upon being issued.
Also, check out the article on Important Articles of the Indian Constitution with this link!
