If president is satisfied that
the financial stability or credit of India or any part of
the state is in
danger than he can issue a proclamation declaring
financial emergency.
His
satisfaction is subject to judicial review.
Such a proclamation has to be
approved by a simple majority in both houses.
If Lok
Sabha is dissolved Rajya Sabha can approve it but Lok
Sabha has
to approve too within 30 days of first sitting after its
been reconstituted.
Once approved it continues
indefinitely [no max period] without repeated legislative
approvals. President
can revoke this proclamation anytime; this doesn’t need
parliament’s approval.
During
the financial emergency, centre can ask states to observe
canons of financial
propriety. It can direct that money bills or financial
bills of state should
need president’s assent.
President can also direct a reduction of salaries of government servants under union or state. These include judges of SC and HC’s.
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