Subject: Polity
Financial Emergency is declared under Article 360 when the financial stability or credit of India is threatened. Under this provision, the President may direct changes in the financial administration of the country, including measures to curb expenditures, reduce salaries of public officials, and reallocate financial resources. This power is designed to restore fiscal discipline and stability during severe economic crises.
Although infrequently invoked, the possibility of a Financial Emergency underscores the breadth of the Centre's authority during times of national economic distress. Legal and judicial safeguards exist to ensure that such measures are applied judiciously and only when absolutely necessary.
The implications of a Financial Emergency extend to both central and State finances, highlighting the intricate balance between fiscal autonomy and national stability.