Article 354 of CoI : Article 354: Application of provisions relating to distribution of revenues while a Proclamation of Emergency is in operation.

Explanation using Example

Example 1:

During a severe national crisis, such as a large-scale natural disaster or a war, the President of India declares a Proclamation of Emergency. The financial situation of the country becomes critical, and the central government needs to reallocate funds quickly to address the emergency.

The President issues an order under Article 354, modifying the provisions of Article 270, which deals with the distribution of taxes between the Union and the States. The order specifies that for the remainder of the financial year, a larger share of the central taxes will be retained by the Union government to fund emergency relief efforts, rather than being distributed to the states as usual.

This order is then presented to both Houses of Parliament for their review and approval as soon as possible after it is issued.

Example 2:

Imagine a scenario where there is a sudden outbreak of a pandemic in India, leading to a nationwide health emergency. The President declares an Emergency under Article 352. To ensure that the central government has sufficient funds to manage the health crisis, the President issues an order under Article 354.

This order modifies the provisions of Article 275, which typically provides for grants-in-aid to certain states. The modification temporarily suspends these grants for the duration of the financial year, allowing the central government to redirect these funds towards purchasing medical supplies, setting up quarantine centers, and other urgent health measures.

The order is then laid before both the Lok Sabha and the Rajya Sabha for their consideration and approval as soon as possible after it is made.