Under what circumstances can the Financial Emergency be proclaimed by the President of India? What consequences follow when such a declaration remains in force? (150 words)

The Financial Emergency in India can be proclaimed by the President of India under certain circumstances. Such a declaration can have significant consequences, which are outlined below:

Grounds of Declaration:

Article 360 of the Indian Constitution empowers the President to declare a Financial Emergency if he is satisfied that the financial stability or credit of India or any part of its territory is threatened.
The satisfaction of the President in declaring a Financial Emergency is subject to judicial review, as per the 44th Amendment Act of 1978.

Consequences of Financial Emergency:

The executive authority of the Centre extends to direct any state to observe such canons of financial propriety as specified by it.
The Centre can also direct the state as deemed necessary and adequate for the purpose, which may include provisions for reducing salaries and allowances of personnel serving in the state.
The Centre can reserve all money bills or other financial bills for the consideration of the President after they are passed by the state legislature.
The President may also issue directions for the reduction of salaries and allowances of personnel serving the Union, judges of the Supreme Court, and high court.
During the operation of a Financial Emergency, the Centre acquires full control over the states in financial matters.
Once approved, a Financial Emergency continues indefinitely until the President revokes it. The revocation of a Financial Emergency does not require parliamentary approval.

In conclusion, a Financial Emergency can be proclaimed by the President of India to deal with a threat to the financial stability or credit of India or any part of its territory. During the operation of such an Emergency, the Centre acquires full control over the states in financial matters. However, such a declaration can have significant consequences for personnel serving in the state and the Union. While the provision for a Financial Emergency exists in the Indian Constitution, it has never been used so far.