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THE CONSTITUTION, MADE UNDERSTANDABLE

Article 360
Provisions as to financial emergency

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Source edition: as on 1 May 2026. Omitted and struck-down reference entries remain labelled. Open the authoritative PDF ↗

Article 360 / Part XVIII

Provisions as to financial emergency

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Plain languageOfficial textPurpose & sources
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THE PLAIN-LANGUAGE GUIDE

What does this mean?

A financial emergency can be proclaimed where India's or a part's financial stability or credit is threatened, subject to the stated parliamentary process. It permits specified financial directions and salary-related measures; it is distinct from the national-security emergency.

National, State-constitutional-machinery and financial emergency powers and their safeguards.

PURPOSE & CONTEXT

Why is this provision here?

A severe financial threat has a distinct constitutional response mechanism rather than automatically invoking a national-security emergency.

Historical evidence

This Article number belongs to the original constitutional framework, but its present wording may include later amendments or substitutions. A provision-specific original Assembly debate has not been verified here. The explanation of function above is editorial inference from the text, not an attributed single motive of the framers. The original draft-making archive is a research resource, not proof of a particular historical reason. The later amendment records linked below document changes affecting this Article; their Bill statements explain those proposals, not necessarily every original clause or the complete present legal outcome.

The explanation of purpose is an editorial reading of the provision. A drafting motive is attributed only where a linked historical source supports it.

Limits, exceptions & reading carefully

Educational summary of the linked source text. Exceptions, provisos, implementing laws and applicable judgments must be read before applying it to a real case.

Amendment references
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Read the official constitutional text
360. Provisions as to financial emergency.—(1) If the President is satisfied that a situation has arisen whereby the financial stability or credit of India or of any part of the territory thereof is threatened, he may by a Proclamation make a declaration to that effect. [(2) A Proclamation issued under clause (1)— (a) may be revoked or varied by a subsequent Proclamation; (b) shall be laid before each House of Parliament; (c) shall cease to operate at the expiration of two months, unless before the expiration of that period it has been approved by resolutions of both Houses of Parliament: Provided that if any such Proclamation is issued at a time when the House of the People has been dissolved or the dissolution of the House of the People takes place during the period of two months referred to in sub-clause (c), and if a resolution approving the Proclamation has been passed by the Council of States, but no resolution with respect to such Proclamation has been passed by the House of the People before the expiration of that period, the Proclamation shall cease to operate at the expiration of thirty days from the date on which the House of the People first sits after its reconstitution unless before the expiration of the said period of thirty days a resolution approving the Proclamation has been also passed by the House of the People.] (3) During the period any such Proclamation as is mentioned in clause (1) is in operation, the executive authority of the Union shall extend to the giving of directions to any State to observe such canons of financial propriety as may be specified in the directions, and to the giving of such other directions as the President may deem necessary and adequate for the purpose. (4) Notwithstanding anything in this Constitution— (a) any such direction may include— (i) a provision requiring the reduction of salaries and allowances of all or any class of persons serving in connection with the affairs of a State; (ii) a provision requiring all Money Bills or other 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. [(5) * * * * *]
Source-page notes · may concern neighbouring Articles

1. Ins. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 40 (w.e.f. 20-6-1979). 2. Added by the Constitution (Forty-second Amendment) Act, 1976, s. 53 (w.e.f. 3-1-1977). 3. Ins. by the Constitution (Fifty-ninth Amendment) Act, 1988, s. 3 (w.e.f. 30-3-1988) and ceased to operate on the expiry of a period of two years from the commencement of that Act, i.e. 30th day of March, 1988. 4. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 41, for cl. (2)

1. Ins. by the Constitution (Thirty-eighth Amendment) Act, 1975, s. 8 (with retrospective effect) and omitted by the Constitution (Forty-fourth Amendment) Act, 1978, s. 41

Extracted from the Legislative Department’s May 2026 edition. Page footnotes may refer to neighbouring provisions; check their markers in the PDF. Inclusion in this edition does not by itself establish commencement or judicial effect.