What is Meant by Financial Emergency?
By BYJU'S Exam Prep
Updated on: November 9th, 2023
A Financial Emergency can be declared in conditions such as when the President is sure that the financial stability of the nation (or a part of the nation) is under threat or when both houses of the Parliament approve the President’s statement within two months. The grounds under which the President of India can declare a financial emergency are outlined in Article 360 of the Indian Constitution.
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Meaning of Financial Emergency
In case a financial crisis arises in the nation, the President shall impose a financial emergency, as under Article 360 of the Indian constitution. Once approved by both the Parliament houses, this imposition can stay for as long as the situation demands.
The Implications of the Financial Emergency:
- The Union gains the authority to issue financial instructions to the states based on its policies.
- The President may direct the states to limit the salaries and allowances of government personnel.
- Money bills and other financial bills can be reserved and brought before the President after passing through the state legislature.
- The President has the right to reduce the salary and allowances of Central Government officials, including Supreme Court and High Court judges.
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