Which of the following accurately reflects the constitutional provisions and historical application of Financial Emergency under Article 360?
No Financial Emergency has ever been declared, but it allows salary cuts of SC judges.
Article 360 of the Indian Constitution provides for the declaration of a Financial Emergency when the financial stability or credit of India or any part of its territory is threatened.
Notably, no Financial Emergency has ever been declared in India since the Constitution came into force, making it the only type of emergency provision under the Constitution that has never been invoked.
Among its provisions, Article 360 does allow for the reduction of salaries and allowances of persons serving the Union or a State, which can extend to constitutional functionaries including judges of the Supreme Court, subject to constitutional safeguards on judicial independence.
The 1991 economic crisis, though severe, was addressed through economic reforms and liberalization rather than a formal declaration of Financial Emergency, and Article 360 does not empower states to withhold central employees' salaries or give the President unilateral power to dismiss the Union Cabinet.
Hence, the answer is no Financial Emergency has ever been declared, but it allows salary cuts of Supreme Court judges.
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