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UPSC 2018 GS-II · 10 marks · 150 words

Under what circumstances can the Financial Emergency be proclaimed by the President of India? What consequences follow when such a declaration remains in force?

What “Explain” demands

set out how or why something works, with the mechanism made explicit.

The characteristic failure: stating that it works without showing how.

What a top answer must contain

These are the checkable specifics from the marking standard for this question — the actual case, committee, datum or thinker, not an instruction to “give examples”.

  • Art 360: threat to the financial stability or credit of India or any part of its territory
  • Procedure: proclamation on Cabinet advice, parliamentary approval within two months by simple majority, indefinite continuance thereafter
  • Consequences: Centre may direct states on financial propriety, reduce salaries of state and Union employees including judges, reserve money bills for the President
  • Never invoked in India — 1991 balance-of-payments crisis handled without it, a fact a good answer supplies
  • Federal implications: it converts fiscal federalism into a unitary arrangement; contrast with Arts 352 and 356

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