What would happen if a financial emergency was declared in India?
A financial emergency is one whose declarations provided in the Indian constitution . Article 360 - Financial Emergency due to a threat to the financial stability or credit of India. Article 360 of our constitution empowers the president to invoke financial emergency. Article 360 has never been invoked till date in India. Impact of financial emergency on : Daily wage workers All small and medium scale enterprises (MSME) Several sectors like hotel , restaurants, BPO, tourism, Bollywood, auto-mobile etc. This provision enable the central government to meet any of abnormal situation effectively. Grounds of Declaration : Article 360 - empowers the president to proclaim 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. To pass it in either house of parliament we need only simple majority. Important for this is that this does not require repeated parliamentary approval. Effects of financial emergency : The executive authority of the centre extends to direct state on any kind of financial bill. The reduction of salaries and allowances of all or any class of persons serving in the state. The president may issue directions for the reduction of salaries and allowances of all class of persons serving the union and the judges of the S. C and H. C. Thus, during the operation of a financial emergency, the centre acquires full control over the states in financial matters.