The third type of Emergency is Financial Emergency provided under Article 360.
It provides that if the President is satisfied that the financial stability or credit of India or any of its part is in danger; he may declare a state of Financial Emergency.
Like the other two types of emergencies, it has also to be approved by the Parliament.
It must be approved by both Houses of Parliament within two months.
There is no maximum period prescribed for its operation.
Repeated parliamentary approval is not required for its continuation.
A resolution approving the proclamation of financial emergency can be passed.
A resolution approving the proclamation of financial emergency can be passed by either House of Parliament only by a simple majority, that is, a majority of the members of that house present and voting.
A proclamation of Financial Emergency may be revoked by the president at any time by a subsequent proclamation. Such a proclamation does not require the parliamentary approval.
Effects of Financial Emergency
The proclamation of Financial Emergency may have the following consequences:
The Union Government may give direction to any of the States regarding financial matters.
The President may ask the States to reduce the salaries and allowances of all or any class of persons in government service.
The President may ask the States to reserve all the money bills for the consideration of the Parliament after they have been passed by the State Legislature.
The President may also give directions for the reduction of salaries and allowances of the Central Government employees including the Judges of the Supreme Court and the High Courts.
So far, fortunately, financial emergency has never been proclaimed.