Q. With reference to consequences of the financial emergency, consider the following the statements:
1. The President may order any state to reduce salaries of its all employees.
2. The Union government gains authority over states with respect to financial matters.
3. The parliament gets empowered to pass money bills of any state.
How many statements given above are correct?
Exp) Option b is the correct answer.
Statement 1 is correct: During the financial emergency, the President can issue directions for the reduction of salaries and allowances of all or any class of persons serving in the state. The President may also issue directions for the reduction of salaries and allowances of all or any class of persons serving the Union, including the judges of the Supreme Court and the high court.
Statement 2 is correct: During financial emergency, the Union government acquires full control over the states in financial matters. The executive authority of the Centre extends to the giving directions to any state to observe such canons of financial propriety as may be specified in the directions.
Statement 3 is incorrect: The parliament does not get empowered to pass money bills of a state. The President can only direct to reserve all money bills or other financial bills for his/her consideration after they are passed by the legislature of the state.
| Important Tips Article 360 of the Indian Constitution empowers the President to invoke financial emergency. A proclamation declaring financial emergency must be approved by both the Houses of Parliament (i.e., Lok Sabha and Rajya Sabha) within two months from the date of its issue. |
