ICSE Class 10 Answered

1. Financial emergency can be proclaimed when the President is satisfied that a situation has arisen whereby the financial stability or credit of the nation is threatened.
2. The proclamation of financial emergency has to be laid down before both the Houses of Parliament and is valid only for two months until approved by the resolution of both the Houses of Parliament. If the Lok Sabha is dissolved when such a proclamation is made and the resolution supporting it has been passed by the Rajya Sabha, the proclamation ceases to exist after the expiry of thirty days from the date on which the Lok Sabhafirst sits after its reconstitution.
3. The effects that the financial emergency has are as follows:

1. The President may appoint the Financial Commission to suggest various ways and methods to get the country out of the financial crisis.
2. The salaries and allowances of all or any class of persons, including the Judges of the Supreme Court and High Courts are reduced.
3. Specific instructions are given by the President to the States in regard to utilisation of funds in the manner he thinks fit.
4. All the money bills that are passed by the Lok Sabhaare submitted to the President for his consent or consideration. Also, the President may order the State to submit the Money bills for his/her assent.
5. The President may adopt any suitable measure to restore financial stability in the country.

No financial emergency has ever been declared in India since the promulgation of the Constitution.