Revision summary
Article 360 is triggered only by a threat to the financial stability or credit of India or any part of it. Parliament must approve the proclamation within two months; it then lasts until revoked. The Union can direct States on financial propriety and reduce salaries of Union and State servants, including judges. State Money Bills and related financial Bills may be reserved for the President. The clause has never been proclaimed; ordinary fiscal law is the first line of defence.
Model answer
Flow diagram
flowchart TD T[Threat to financial stability or credit] --> P[President Art 360] P --> H[Both Houses within two months] H --> D[Directions to States] H --> S[Salary cuts including judges] H --> M[State Money Bills reserved]
Conclusion
- Keep Article 360 as a last-resort constitutional valve, and rely first on the FRBM architecture, GST Council discipline, and Finance Commission conditionality.
- If ever used, Parliament should attach a clear fiscal correction plan and a sunset review, so a “until revoked” emergency does not become an indefinite Union tutelage over State Budgets.
The President may proclaim a financial emergency only when India’s financial stability or credit, or that of any part of the territory, is threatened, and Parliament must approve the proclamation within two months. While it lasts, the Union can dictate canons of propriety, cut even judicial salaries, and reserve State Money Bills — which is why the clause is drastic, and why it has never been used.
Quick related
Students also ask
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Explain the salient features of the constitution(One Hundred and First Amendment) Act, 2016. Do you think it is efficacious enough 'to remove cascading effect of taxes and provide for common national market for goods and services'? (250 words).
Next question on this syllabus topic (2017 · Q11). View answer →
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Has a financial emergency ever been declared in India?
No. Article 360 has remained unused even in severe Balance-of-Payments and fiscal-stress years.
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Does Article 360 suspend Article 19 like a national emergency?
No. Article 358 is tied to Article 352. A financial emergency works through directions, salary cuts and reservation of State financial Bills.
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