Who has the authority to declare a financial emergency in India?

Key Points

• The authority to declare a financial emergency in India lies with the President.
• This power is granted under Article 360 of the Constitution of India.
• A financial emergency can be declared if the President is satisfied that the financial stability or credit of India is threatened.
• Once declared, the executive authority of the Union extends to giving directions to any state to observe such canons of financial propriety as may be specified in the direction.
• During the period of financial emergency, the President can reduce the salaries and allowances of all or any class of persons serving in the state and Union, including judges of the Supreme Court and High Courts.

Additional Information

• The Constitution of India provides for three types of emergencies: National Emergency, State Emergency (President's Rule), and Financial Emergency.
• So far, no financial emergency has been declared in India since the adoption of the Constitution.
• A proclamation of financial emergency must be approved by both houses of Parliament within two months of its issuance.
• Once approved, it remains in force indefinitely until revoked by the President.
• The declaration of a financial emergency can have significant implications for the federal structure and financial autonomy of the states.