Article 360: Financial Emergency in India

EMERGENCY PROVISIONS (Part XVIII: Articles 352 – 360)

• These provisions have been borrowed from the Government of India Act 1935. It converts the federal structure into a unitary one without a formal amendment of the Constitution. 
• It is needed to safeguard the sovereignty, unity, integrity and security of the country, the democratic political system and the Constitution.
• “Suspension of Fundamental Rights during Proclamation of Emergency” provision borrowed from the Weimar Constitution.

Important Articles

• Article 352: Emergency due to war, external aggression or armed rebellion (National Emergency).
• Article 356: Emergency due to the failure of the constitutional machinery in the states (President’s Rule).
• Article 360: Financial emergency due to threat to financial stability or credit of India.

Financial Emergency in India: Grounds, Approval, Duration, and Revocation

• The President proclaims a financial emergency if he is ‘satisfied’ that a situation has  arisen due to which the financial stability or credit of India or any part of its territory is threatened.

• Simple majority: Approval of both houses within two months from the date of its issue.
• If the proclamation of financial emergency is issued at a time when the LS has been dissolved, or the dissolution of LS takes place during the period of two months without approving the proclamation, it survives until 30 days from the first sitting of the LS after its reconstitution, provided RS has passed it in the meantime.

• Once approved, the emergency continues indefinitely until revoked.
• No periodic approval is needed.

• 38th Amendment: Satisfaction of president in declaring financial emergency made immune from judicial review.
• 44th Amendment: Provisions made under 38th Amendment deleted, so subject to Judicial Review

• Revoked by the president.
• No parliamentary approval required.

• No Financial Emergency has been declared so far.

• By President (Lok Sabha only).
• No Parliamentary approval required.

• By President. 
• No Parliamentary approval required.

• By President. 
• No Parliamentary approval required.