4.3. Effects of Financial Emergency

♤ During the period of Financial Emergency, the President can give directions to the States to observe the canons of financial propriety.

♤ He can issue directions to reduce the salaries and allowances of all or any class of persons serving under the State, or the Union including the judges of the Supreme Court and High Court.

♤ All money and financial bills passed by the State Legislature can be reserved for the

President’s consideration during the period of Financial Emergency.

♤ A state of Financial Emergency has not been declared so far in the country, even though the country did face a severe economic crisis in the years 1990-1991.