Financial Emergency – Emergency Provisions (360)
The Financial Emergency provisions of the Indian Constitution are contained in Article 360. These provisions were inserted in the Constitution by the 42nd Amendment in 1976. The provisions enable the President to declare a financial emergency if he is satisfied that a grave financial emergency exists whereby the financial stability or credit of India is threatened.
The President can declare a financial emergency by issuing a Proclamation. The Proclamation must be laid before each House of Parliament and must be approved by both Houses within two months. If the Proclamation is not approved by both Houses within two months, it will lapse.
Once a financial emergency has been declared, the President can take a number of measures to deal with the emergency. These measures include:
- Taking control of the Reserve Bank of India
- Imposing restrictions on the transfer of money out of India
- Imposing restrictions on the borrowing of money by the Government of India
- Imposing restrictions on the expenditure of the Government of India
- Taking possession of any property belonging to the Government of India
- Taking any other measure which he considers necessary to deal with the emergency
The Financial Emergency provisions have been used only once in the history of India. They were used by the Indira Gandhi government in 1975. The government declared a financial emergency in order to deal with the economic crisis that India was facing at the time. The emergency was lifted in 1977 after the Janata Party came to power.
The Financial Emergency provisions have been criticized by many people. They have been accused of being undemocratic and of giving too much power to the President. They have also been accused of being used by the government to suppress dissent.
Despite these criticisms, the Financial Emergency provisions remain in the Constitution. They could be used again in the future if the government feels that it is necessary to deal with a financial crisis.
Frequently Asked Questions
- What is a financial emergency?
A financial emergency is a situation in which the financial stability or credit of a country is threatened.
- What are the provisions of Article 360 of the Indian Constitution?
Article 360 of the Indian Constitution enables the President to declare a financial emergency if he is satisfied that a grave financial emergency exists whereby the financial stability or credit of India is threatened.
- What are the measures that the President can take under Article 360?
The President can take a number of measures to deal with a financial emergency, including:
- Taking control of the Reserve Bank of India
- Imposing restrictions on the transfer of money out of India
- Imposing restrictions on the borrowing of money by the Government of India
- Imposing restrictions on the expenditure of the Government of India
- Taking possession of any property belonging to the Government of India
- Taking any other measure which he considers necessary to deal with the emergency
- When have the Financial Emergency provisions been used in India?
The Financial Emergency provisions have been used only once in the history of India. They were used by the Indira Gandhi government in 1975.
- What are the criticisms of the Financial Emergency provisions?
The Financial Emergency provisions have been criticized by many people. They have been accused of being undemocratic and of giving too much power to the President. They have also been accused of being used by the government to suppress dissent.
- Are the Financial Emergency provisions still in the Constitution?
Yes, the Financial Emergency provisions remain in the Constitution. They could be used again in the future if the government feels that it is necessary to deal with a financial crisis.
MCQs
- What is a financial emergency?
(a) A situation in which the financial stability or credit of a country is threatened.
(b) A situation in which the government is unable to pay its debts.
(c) A situation in which the value of the currency falls sharply.
(d) A situation in which there is a run on the banks.
- What are the provisions of Article 360 of the Indian Constitution?
(a) Article 360 enables the President to declare a financial emergency if he is satisfied that a grave financial emergency exists whereby the financial stability or credit of India is threatened.
(b) Article 360 enables the President to declare a financial emergency if he is satisfied that a grave financial emergency exists whereby the economic stability or credit of India is threatened.
(c) Article 360 enables the President to declare a financial emergency if he is satisfied that a grave financial emergency exists whereby the political stability or credit of India is threatened.
(d) Article 360 enables the President to declare a financial emergency if he is satisfied that a grave financial emergency exists whereby the social stability or credit of India is