Article 360 of the Indian Constitution deals with the provision of a financial emergency. It is one of the three types of emergencies provided in the Constitution, the other two being national emergency (Article 352) and state emergency or President’s Rule (Article 356). Article 360 empowers the President of India to declare a financial emergency in the country if he or she is satisfied that the financial stability or credit of India, or any part of its territory, is threatened. Text and Meaning The actual text of Article 360 reads: (1) If the President is satisfied that a situation has arisen whereby the financial stability or credit of India or of any part of the territory thereof is threatened, he may by a Proclamation make a declaration to that effect. The use of the phrase if the President is satisfied implies that the decision is largely discretionary, though in practice, the President acts on the advice of the Cabinet. Approval and Duration Once the President proclaims a financial emergency, the proclamation must be approved by both Houses of Parliament within two months from the date of its issue. If the Lok Sabha is dissolved at the time, the Rajya Sabha must approve it within two months, and the newly reconstituted Lok Sabha must approve it within 30 days of its first sitting. Once approved, there is no time limit on how long a financial emergency can continue. It can last indefinitely until it is revoked by the President. Effects of a Financial Emergency f Article 360 is invoked, it gives the central government sweeping powers over the states in financial matters. Some key implications include: Reduction of Salaries and Allowances: The central government gets the authority to reduce the salaries and allowances of all or any class of people serving in connection with the affairs of the Union or the states, including judges of the Supreme Court and High Courts. Direction to States: The President can issue directions to any state to observe financial propriety, which may include instructions on how state funds should be used. Reallocation of Financial Resources: The Union can take control of how funds are allocated and spent by both the Centre and the states to maintain financial discipline. Historical Context No financial emergency has ever been declared in India since the Constitution came into force in 1950. Even during severe economic crises, such as the 1991 balance of payments crisis, the government managed to avoid invoking Article 360 by implementing structural reforms and seeking assistance from the International Monetary Fund (IMF). Criticism and Concerns Article 360 has been criticized for being too broad and open to misuse. Since it grants extensive powers to the Centre, there is a fear that it could be used to undermine the federal structure of the Constitution. Moreover, the reduction of judicial salaries could be viewed as a threat to judicial independence. Conclusion Article 360 serves as a constitutional safeguard against financial instability, ensuring the central government can act decisively in times of financial crisis. However, its non-use to date reflects both the strength of India’s federal fiscal management and the cautious approach of governments in invoking such extraordinary powers. Nonetheless, its presence ensures that the Constitution has provisions to deal with extreme financial emergencies, should the need ever arise.