How Many Times Financial Emergency in India

Introduction

The Indian Constitution's Article 360 gives the President the authority to declare a financial emergency. There has never been a need for Article 360 (Financial Emergency). However, in 1991, a balance of payment crisis made the decision to declare a financial emergency precarious. But at that time, it wasn't announced.

The Consequences of a Financial Emergency

1. Any State must follow the financial propriety rules that may be specified in the directions, according to the Union government's directives.

2. The directions are:

• The President has the authority to direct the States to reduce the pay and benefits of any class of employees who are working in connection with the current situation.

• Once they have been approved by the State's Legislature, money bills and other financial bills must be kept for the President's consideration.

• Additionally, the President has the authority to direct that the salaries and benefits of all or any class of individuals working in Union business, including Supreme Court and High Court judges, be reduced.

Criticism

• During a financial emergency, the Union government acquires full control over the States in relation to financial matters.

• The State's ability to manage its own finances is put in danger by this.

• The financial independence of the States is seriously threatened, in H N Kunzru's opinion, by the financial emergency provisions.

Significance

• The inclusion of provisions for financial emergencies was justified by Dr BR Ambedkar, one of the architects of the Constitution, as follows: "This article more or less follows the National Recovery Act, 1933 of the United States, which gave the President power to make similar provisions in order to overcome the difficulties of the American people caused by the Great Depression of the 1930s."

• Economic recessions and other financial crises can be easily avoided with the help of financial emergency provisions.

parliamentary Approval and Duration

• The Lok Sabha and the Rajya Sabha must both approve a proclamation stating a financial emergency within two months of the date it was issued.

• If such a proclamation is made at a time when the Lok Sabha has already been dissolved or during the two months following the dissolution without the proclamation receiving approval, the proclamation will remain in effect until 30 days after the first meeting of the newly reconstituted Lok Sabha, provided the Rajya Sabha has approved it in the interim.

• The Financial Emergency remains in effect once both Houses of Parliament have given their approval until it is revoked.

Conclusion

According to Article 360, the President may declare a state of financial emergency if he or she determines that India's financial stability or credit, or any part of it, is in danger. Both Houses of Parliament must vote in favour of it within two months and it must be approved by the Parliament. A subsequent proclamation may revoke Financial Emergency, which may continue to apply for however long the circumstances require.