FINANCIAL
EMERGENCY - POLITY
News:
Governor, CPI(M) battle
over petition to declare a state of financial emergency in Kerala
What's
in the news?
●
Governor Arif Mohammed Khan and the
Communist Party of India (Marxist) [CPI(M)] appeared poised to battle each
other over a politically contentious petition seeking the Presidential
imposition of a financial emergency in the State under Article 360(1) of the
Constitution.
Rationale
of Emergency in India:
●
The rationality behind the incorporation
of Emergency provisions in the Constitution is to safeguard the sovereignty, unity, integrity and security of the
country, the democratic political system, and the Constitution.
●
During an Emergency, the central
government becomes all powerful and the states go into the total control of the
Centre.
●
It converts the federal structure into a
unitary one without a formal amendment of the Constitution.
●
This kind of transformation of the
political system from federal during normal times to unitary during Emergency
is a unique feature of the Indian Constitution.
Constitutional
Provision of Financial Emergency:
●
Article
360
empowers the Union government to take control over state govt on every
financial matter dealt by a state.
●
The
Financial Emergency has never been imposed in any part of the country, neither has Article 360 been used till now.
Grounds
of Declaration of Financial Emergency:
●
The President
of India proclaims the Financial Emergency under Article 360 of the
Constitution, when he is satisfied that the financial stability or credit of
India or of any part of the territory thereof is threatened.
●
The 38th
Amendment Act of 1975 made the president's satisfaction in declaring a
Financial Emergency final and conclusive and not questionable in any court on
any ground.
●
But this provision was subsequently
deleted by the 44th Amendment Act of
1978 implying that the satisfaction of the president is not beyond judicial
review.
Parliamentary
Approval and Duration:
1. A proclamation
approving the financial emergency should be approved by the Parliament through a simple majority within two months.
2. If the LS is not in
session or has been dissolved then the proclamation continues until 30 days
from the first sitting of the LS after its reconstitution, provided RS has
approved it in the meantime
3. Once approved by the parliament, the financial emergency continues
indefinitely till it is revoked. Implying, there is no maximum prescribed
maximum period for its operation and there is no repeated need for
parliamentary approval for its continuation
4.
The President can discontinue this emergency by passing another proclamation to
this effect. Such a proclamation does not require parliamentary approval.
Consequences
of Financial Emergency:
1.
The executive authority of the Centre extends:
●
To direct any state to observe such canons
of financial propriety as are specified by it
●
To direct the state as the President may
deem necessary and adequate for the purpose.
2.
Any such direction may include a provision requiring:
●
the reduction of salaries and allowances
of all or any class of persons serving in the state and
●
the reservation of all money bills or
other financial bills for the consideration of the President after they are
passed by the legislature of the state.
3.
The President may issue directions for the reduction of salaries and allowances
of
●
all or any class of persons serving the
Union and
●
the judges of the Supreme Court and the
high court.
4.
Thus, during the operation of a financial emergency, the Centre acquires full
control over the states in financial matters.
5.
Once approved it continues indefinitely without repeated legislative approvals.
The President can revoke this proclamation anytime. This doesn’t require
parliamentary approval.