General Knowledge / Financial emergency under Article 360If the President is satisfied that there is an economic situation in which the financial stability or credit of India is threatened, he or she can declare financial emergency. Such an emergency must be approved by the Parliament within two months. It has never been declared. Such a situation had arisen but was avoided by putting the gold assets of India as collateral for foreign credit.
In case of a financial emergency, the President can reduce the salaries of all government officials, including judges of the Supreme Court and High Courts. All money bills passed by the State legislatures are submitted to the President for his approval. He can direct the state to observe certain principles (economy measures) relating to financial matters; but fundamental rights cannot be suspended.