Article 360 of CoI : Article 360: Provisions as to financial emergency.

Explanation using Example

Example 1:

Scenario: Economic Crisis in a State

Situation: Imagine the state of Maharashtra is facing a severe economic crisis due to a natural disaster that has devastated its agricultural sector, leading to a significant drop in revenue and an increase in debt. The financial stability of the state is under threat, and it is unable to meet its financial obligations.

Application of Article 360:

1. Proclamation of Financial Emergency: The President of India, upon being satisfied that the financial stability of Maharashtra is threatened, issues a Proclamation declaring a financial emergency in the state.
2. Parliamentary Approval: This Proclamation is laid before both Houses of Parliament. If both Houses approve the Proclamation within two months, it continues to operate; otherwise, it ceases to operate.
3. Directions to the State: During the financial emergency, the Union government issues directions to Maharashtra to observe financial propriety. This may include measures such as:
   • Reducing the salaries and allowances of state government employees.
   • Requiring all Money Bills passed by the Maharashtra Legislature to be reserved for the President's consideration.
4. **Unio...

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