Question

When a financial emergency is proclaimed ____________________.

• A. repayment of government debts will stop
• B. payment of salaries to public servants may be postponed.
• C. salaries and allowances of any class of employees may be reduced
• D. Union Budget will not be presented

Answer 1

The correct option is B payment of salaries to public servants may be postponed.

Under Article 360 of the Indian Constitution President can impose financial emergency if he is satisfied that a situation has arisen due to which financial stability or credit of India or any part of it is in danger. The proclamation must be approved by both the houses of Parliament within two months of its issue. The effects of Financial emergency are that President can direct the reduction of salaries and allowances of any class of employees serving them state and postponement of the salary of Public servants amongst other directions.