Article 360 of the Indian Constitution allows the President to declare a Financial Emergency when India’s economic stability, fiscal system, or national credit faces serious threat.

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• Article 360 empowers the President to impose Financial Emergency if India’s financial stability or economic credibility comes under severe constitutional or fiscal danger.
• Financial Emergency provisions were adopted from the Government of India Act 1935 to protect national unity, governance stability, and constitutional functioning during crises.
• The proclamation must receive approval from both Houses of Parliament within two months through a simple majority to remain constitutionally effective and enforceable.
• Once approved, Financial Emergency can continue indefinitely until revoked by the President without requiring repeated parliamentary approvals for its continuation.
• During Financial Emergency, the Centre can direct states to follow strict financial discipline, expenditure controls, and specific economic management policies.
• The President gains authority to reduce salaries and allowances of government employees, including Supreme Court and High Court judges during the emergency period.
• Article 360 also allows the Centre to reserve state financial bills and money bills for presidential consideration after passage in state legislatures.
• India has never declared a Financial Emergency so far, although the country experienced a severe economic and balance of payments crisis in 1991.