Which of the following accurately reflects the constitutional provisions and historical application of Financial Emergency under Article 360?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. No Financial Emergency has ever been declared, but it allows salary cuts of SC judges.
Article 360 of the Indian Constitution empowers the President to declare a Financial Emergency if the financial stability or credit of India is threatened. While India faced a severe Balance of Payments crisis in 1991, the government managed it through reforms and gold pledging without ever invoking Article 360. A unique provision of this emergency is that the President can issue directions to reduce the salaries and allowances of all classes of persons serving the Union or States, including the judges of the Supreme Court and High Courts, which are otherwise protected.