Page 47 - Banking Finance May 2020

ARTICLE

Bills to which the provisions of article 207 apply to be reserved for the consideration of the President after
they are passed by the Legislature of the State
(b) it shall be competent for the President during the period any Proclamation issued under this article is in operation
to 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.

Effects of Financial Emergency
1. The executive authority of the Centre extends
to directing any state to observe such canons of financial propriety as are specified by it;
to directions 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 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. Thus, during the operation of a financial emergency, the Centre acquires full control over the states in financial
matters.

Difference between Article 352 and Article 356?

Point of Difference ARTICLE 352 ARTICLE 356
Application In situations of war, external aggression In situation of failure of constitutional
or armed rebellion. machinery in State
Effect No authority to the Centre to suspend The state legislature ceases to function as
the Constitution in a state. it is dissolved.
Effect on Fundamental affects Fundamental Rights Does not affect Fundamental Rights
Rights
Centre-State Relationship the relationship of all the states with the relationship of only one state where the
the Centre changes action is taken changes with the Centre
Proclamation Approved by the Parliament within 1 Approved by the Parliament within 2 months
month and thereafter every 6 months and thereafter every 6 months, and the
and there is no maximum duration maximum period that it remains in force is 3
prescribed years.

Implication
As per the articles 352, 356 and 360 in the Constitution of India, President of India have been given extraordinary power
to declare an emergency to meet any threat to the country. Those powers to President of India in Constitution are called
emergency provisions. This could have been constitutional provision exercised by central government i.e. imposition of
emergency which would have given the country a unitary structure, allowing it to override the directions of the states.

However the declaration of an emergency would have been counterproductive, It would have meant that all powers
would have vested with the Centre whereas this is a situation where the state government's response is critical, as health
and police are being dealt by state and states must be backed by power to deal with this emergency, where urgent and
quick decisions are need of the hour.

BANKING FINANCE | MAY | 2020 | 47