The rapid outbreak of COVID-19 has thrown a massive challenge to the whole world. From east to west every country is fighting against this global pandemic. Various countries including India has imposed lockdown and restricted business activities to stop the spread of the virus. The industries are being shut down, school, colleges and universities are being closed for an uncertain period.
In this situation, the economic crisis of India is getting worse day by day. The government of India and the state governments are doing their best to stabilize the country’s economic condition. The Member of Parliaments, the President, Vice-President and the Governors of the States have donated their 30% salaries to the Consolidated Fund of India to fight against this deadly virus.
In such a difficult situation, there has been a doubt among people’s mind that whether financial emergency will be imposed in the country to save the economy. However, Finance Minister Nirmala Sitaraman while addressing the media has been clarified that the government is not taking any move to declare financial emergency in the country.
What is Financial Emergency?
A Financial Emergency (Article 360) is one of the three type of emergency that is provided in the Constitution of India. The other two are the National Emergency ( Article 352) and State Emergency or President’s Rule (Article 356).
Article 360 empowers the Government of India to ask the President to declare Financial Emergency in such a situation whereby the financial stability or the credit of India or any part of India is threatened.
Thus Under Article 360, if the President of India is satisfied that the financial stability or the credit of India or any part of its territory is threatened, He can declare financial emergency. Here the satisfaction of the President arrive on the advice of the Council of Ministers.
However, the proclamation of emergency by the President can be challenged before the Supreme Court by way of Judicial review.
The proclamation of Financial Emergency further must be approved by both houses of the Parliament within two months from the date of its issue. Once the proclamation is approved by both houses of Parliament the Financial Emergency shall continue to operate till it is revoked by a subsequent proclamation for revocation.
Consequences-
- During the operation of Financial Emergency, the executive authority of the Union shall extend to giving necessary direction to any states for maintaining financial stability.
- The President may direct to reduce the salaries and allowances of any class of person serving the state including the judges of Supreme Court and High Courts.
- All Money Bills and Financial Bills passed by the Legislature of the State shall be reserved for the consideration of the President.
Thus during the Financial Emergency, the Central Government gets full control over the states in financial matters. The states lose their financial sovereignty during the operation of Article 360 it can merely act as a subordinate to the Centre to follow the directions.
Although, earlier we have seen some financial crisis in India, but since no financial emergency has been proclaimed in India yet. Therefore, we hope the Government will take conscious decisions to deal with this situation. The whole country stands with the government to fight against COVID-19 pandemic.
Also Read – Quarantine Laws Preventing Spread of COVID-19 Around the World
