Financial emergency may be declared by the President under:

Solution (By Examveda Team)

A Financial Emergency is a special provision under the Indian Constitution that allows the central government to take control of the country's financial stability in times of crisis. It is declared by the President of India under Article 360 when the financial stability or credit of India or any part of its territory is threatened.

Explanation:

Under Article 360, if the President is satisfied that a financial emergency exists, they may declare a Financial Emergency. Once proclaimed, this emergency remains in operation unless revoked by the President. Parliamentary approval is required within two months.

During a Financial Emergency, the central government gains extensive control over state finances, including:

1. Reduction of government salaries: The salaries of government employees, including judges of the Supreme Court and High Courts, can be reduced.

2. Control over financial matters: The President can direct states to follow certain financial policies to restore economic stability.

3. Allocation of resources: The financial autonomy of states is significantly curtailed as the central government takes charge of financial decisions.

Why not other options?

Option A: Article 352 – Incorrect, as Article 352 deals with a National Emergency due to war, external aggression, or armed rebellion.

Option B: Article 356 – Incorrect, as Article 356 provides for President’s Rule in a state when its constitutional machinery fails.

Option C: Article 359 – Incorrect, as Article 359 allows the President to suspend Fundamental Rights during a National Emergency, but it does not deal with a Financial Emergency.

Thus, the correct answer is Option D: Article 360.