Article 360 – Provisions as to Financial Emergency
Article 360 empowers the President to proclaim a financial emergency, if he is satisfied that a situation has arisen due to which the Financial stability or Credit of India or any part of its territory is threatened.
Approval and duration
- A Proclamation declaring financial emergency must be approved by both the Houses of Parliament within two months from the date of its issue.
- If lok sabha has been dissolved during the period of two months without approving the proclamation then the proclamation survives until 30 days from the first sitting of the Lok Sabha, provided the Rajya Sabha has in the meantime approved it.
- Once approved by both the Houses of Parliament the financial emergency continues indefinitely till it is revoked.
- In case of financial emergency, no repeated parliamentary approval is required.
- No maximum period is defined for financial emergency.
- For passing the resolution only simple majority is required.
- A proclamation may be revoked by 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-
- Directing any state to observe such canons of financial propriety as are specified by it, and
- Directions as the President may deem necessary and adequate for the purpose.
- Provisions requiring-
- The reduction of salaries and allowances of all or any class of persons serving in the state.
- The reservation of all money bills or other financial bills for the consideration of the president after they passed by the legislature of the state.
- The President may issue directions for the reduction of salaries and allowances of-
- All or any class of persons serving the Union.
- The Judges of the Supreme Court and the High courts.
“Clause 5 article 360 is omitted from the 44th Constitutional amendment act 1978, as the satisfaction of the President is not beyond Judicial review.”
No Financial Emergency has been declared so far though there was a Financial crisis in 1991.