Learn about Financial Emergency

When the Indian President is satisfied with the situation which arises due to financial reasons or any part of the state is threatened by it then he/she can impose a financial emergency. And for anyone who wants to know for how much time it can stay then the maximum period for financial emergency is having no limit. After the proper analysis and calculation if the solution came out that there is no requirement of emergency only then it can be taken off.  Remember it is not just about the president’s satisfaction but the judicial review is also required to impose this emergency.

Approval of parliament and time limit of financial emergency

The proclamation of a financial emergency has to get approval from Both houses of the parliament. The maximum time to get approval is two months from its issue date. Once it is approved by them then the Financial emergency in India will stay till the next order. Since The maximum period for financial emergency is having no limits the country hasn’t faced this emergency till now. For the continuation, there is no requirement of parliament again. With a simple majority of Lok Sabha or Rajya Sabha, the resolution proclamation for approval can be passed. But the president has all the right to revoke the Financial Emergency without the consent of Parliament. 

Here judicial help can be taken into the matter also when the president has to impose a big financial emergency like on more than one state at that time other members of Lok Sabha and Rajya Sabha will have to interfere and give their final verdict on the impact of financial emergency for those states. Since it is not easy to impose an emergency on many states till now 0 incidents are recorded for financial emergency in India.

Financial Emergency Effects

1. At the time of financial emergency in India, the authority can be expanded and they have the right to give financial order to any of the states as per their own norms.
2. All finance or money-related bills will be received by the legislature of the state and then they will give approval for the president’s consideration and that can be kept reserved.
3. The salary also the allowances of any class who is working under state government will have to get a reduced salary. 
4. The president can also interfere to reduce the salaries and allowances who are under union and also the judges from both the high court and supreme court will have to face this disadvantageous situation.

Without the Financial Emergency so far President, Vice President and State Government chose to get 30% less pay till 2021. Now if a financial emergency has taken place then it will be a big threat to the state’s financial conditions. Now central govt. has the right to decide the maximum period for financial emergency for the state as well.

Financial Emergency for a particular state

The Union government has the full right to ensure that the state’s government is working according to the constitutional provision. Financial emergency Article 356 says the president can issue proclamations for the state’s financial emergency.  If the reports which are submitted by the state’s government are not satisfactory at that time, the President can take full charge to impose a financial emergency for the particular state. In this kind of situation, proclamation on account of the failure of constitutional machinery refers to the president of India.

Other Emergencies

Article 352 National Emergency: 

This emergency is important not just for the country but for economic conditions as well. Like as you see during a national emergency which is imposed due to war it means there will surely be an effect on the finance of the country as well so a financial emergency may come into effect after the national emergency to control the damage to the country has got during these unwanted war situations.

Here a national emergency is called by the president for the safety of the country and mostly during wartime. So far India has imposed this emergency 2 times. 

• For the Indo China War
• For the Indo Pak war
• In 1975 Indra Gandhi the very next day after her power was taken by the government for election post.

Conclusion

India’s financial emergency is inspired by the United States of America’s National Recovery Act 1933 where they have created that type of provision to tackle the 1930 Great depression. During the hunger and financial humiliation India never chose to impose a financial emergency so there are no stats on how much and how long The maximum period for financial emergency was invoked. But Financial emergency Article 356 still can influence the time of inflation due to a single state. If one state is having a big impact on India’s economy negatively then a financial emergency can be implemented.