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Under Article 354, during a National Emergency, the President may modify the distribution of revenues between Union and States, but such modifications must be approved by ______ within specified timeframe.
- Supreme Court
- Parliament
- Finance Commission
- Cabinet
Answer: Parliament
Article 354 financial relations during Emergency: (a) Constitutional provision: During Emergency, President may modify distribution of revenues between Union and States (e.g., tax devolution, grants-in-aid), (b) Parliamentary approval: Modifications must be approved by Parliament within specified timeframe (typically aligned with Emergency approval timeline), (c) Rationale: Enable coordinated fiscal response to crisis (e.g., war financing, disaster relief) while preserving Parliamentary oversight, (d) Applications: (i) 1962, 1971 Emergencies: Fiscal adjustments for defence spending, resource mobilization, (ii) Post-Emergency: Modifications cease unless re-approved; federal fiscal normalcy restored, (e) Federal balance: Temporary enhancement of Union's fiscal control for crisis management, reversible post-Emergency to restore State autonomy, (f) Illustrates calibrated fiscal federalism: Enabling coordinated fiscal response to existential threats while preserving State autonomy through Parliamentary approval, time limits.