GS Paper II 2018 · Q3
10 marks · 150 words Constitution: evolution, features & basic structure X-Ray · Core #2Under what circumstances can the Financial Emergency be proclaimed by the President of India? What consequences follow when such a declaration remains in force?
Approach · directive: “under what circumstances / what consequences”
What it asks · State when Article 360 can be invoked, the approval and duration rules, and the effects on the Union, the States and judges' pay.
It asks 2 things — answer each
- Under what circumstances: the ground in Article 360, judicial review, and the approval and duration rules
- What consequences follow while the Proclamation is in force: for the States, for salaries including judges', and for the federal balance
Open with · Ambedkar told the Constituent Assembly (16 October 1949) that draft Article 280A followed the US National Recovery Act; as Article 360 it has never been invoked.
Cover
- Ground: the President's satisfaction that the financial stability or credit of India, or of any part of its territory, is threatened.
- Justiciable: the 38th Amendment (1975) added a clause making that satisfaction final; the 44th Amendment (1978) omitted it, opening it to judicial review.
- Approval and duration: laid before both Houses, it lapses after two months unless approved; then it runs until revoked, with no maximum.
- Effects on States: directions to observe canons of financial propriety; Money Bills and other financial Bills may be reserved for the President.
- Salaries: reduction for persons serving the Union or States, including Judges of the Supreme Court and High Courts (Article 360(4)).
- Federal cost: State fiscal autonomy is suspended in substance and judicial independence touched.
Close with · Ambedkar wanted an express provision so the President would not be powerless in an economic emergency; never used so far, it remains a reserve power held in check by Parliament and the courts.
Add value (verified)
- Article 360(1) sets the ground for a Financial Emergency: a threat to the financial stability or credit of India or of any part of its territory.The Constitution of India (as on 1 May 2024), Article 360(1) — Legislative Department ↗“If the President is satisfied that a situation has arisen whereby the financial stability or credit of India or of any part of the territory thereof is threatened, he may by a Proclamation make a declaration to that effect.”
- Ambedkar told the Constituent Assembly on 16 October 1949 that draft Article 280A followed the pattern of the US National Recovery Act.Constituent Assembly Debates, 16 October 1949 (constitutionofindia.net) ↗“this article more or less follows the pattern of what is called the National Recovery Act of the United States passed in the year 1930 or thereabouts, which gave the power to the President to make similar provisions”
- Ambedkar explained that an express provision would prevent India's President from being powerless in a similar financial and economic emergency.Constituent Assembly Debates, 16 October 1949 (constitutionofindia.net) ↗“A similar fate perhaps might overwhelm our President if he were to grapple with a similar financial and economic emergency. In order to prevent any such difficulty we thought it was much better to make an express provision in the Constit”
- Article 360(4)(b) lets the President direct reduction of salaries and allowances of Union employees, including Judges of the Supreme Court and the High Courts.The Constitution of India (Legislative Department, Government of India) ↗“issue directions for the reduction of salaries and allowances of all or any class of persons serving in connection with the affairs of the Union including the Judges of the Supreme Court and the High Courts.”
Question: UPSC's CS (Main) 2018, GS Paper II — paper ↗. Approach: Minimalist IAS, checked 3 Oct 2026 (how we verify) — UPSC publishes no model answers. ·
Model answer· 217words · Minimalist IAS
In the Constituent Assembly (16 October 1949), Dr B.R. Ambedkar said draft Article 280A followed the US National Recovery Act. As Article 360, it is the one emergency never proclaimed.
Circumstances for proclaiming a Financial Emergency
- Ground: the President's satisfaction that the financial stability or credit of India, or any part of it, is threatened.
- Justiciable satisfaction: the 38th Amendment (1975) added a clause making it final; the 44th Amendment (1978) omitted that clause, allowing judicial review.
- Parliamentary approval: laid before both Houses, it lapses after two months unless both approve; then it runs until revoked, with no maximum.
- Threat to financial stability
- Proclamation
- Both Houses approve within two months
- In force until revoked
Consequences while it remains in force
- Union directions: States may be directed to observe canons of financial propriety.
- Money Bills: States may have to reserve Money Bills and other financial Bills for the President.
- Salaries: pay of persons serving the Union or States may be cut, including Judges of the Supreme Court and High Courts (Article 360(4)).
- Federal cost: State fiscal autonomy is suspended in substance; judicial independence is touched.
Ambedkar wanted an 'express provision' so that India's President, unlike America's, would not be helpless in an economic emergency. Never yet proclaimed, it remains a reserve power checked by Parliament and the courts.
Prepared by Minimalist IAS to the answer standard of Shivam Singh (mentor, 7 years) · facts checked against official sources (how we verify) · updated 3 Oct 2026. UPSC publishes no model answers: compare your structure and coverage with this, then write your own.
