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The centre-state financial relations in normal times undergo changes during emergencies. Which of the following emergencies comes under it?

The centre-state financial relations in normal times undergo changes during emergencies. Which of the following emergencies comes under it? Correct Answer Both 1 & 2

The correct answer is 3 i.e. Both 1 & 2.

Explanation:

  • The Centre-state financial relations in normal times change in emergencies.
  • These are described as follows:
     
Emergencies Impact on center-state relations
National emergency
  • While the proclamation of national emergency (under Article 352) is in operation, the president can modify the constitutional distribution of revenues between the Centre and the states.
  • This means that the president can either reduce or cancel the transfer of finances (both tax sharing and grants-in-aid) from the Centre to the states.
  • Such modification continues till the end of the financial year in which the emergency ceases to operate.
Financial emergency
  • While the proclamation of financial emergency (under Article 360) is in operation, the Centre can give directions to the states:
    • To observe the specified canons of financial propriety.
    • To reduce the salaries and allowances of all classes of persons serving in the state.
    • To reserve all money bills and other financial bills for the consideration of the President.

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