GK Question

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Under Article 354, during National Emergency, the President may by order modify the distribution of revenues between Union and States as provided in Chapter I of Part XII, subject to approval by ______.

  1. Supreme Court
  2. Parliament
  3. Finance Commission
  4. State Legislatures

Answer: Parliament

Emergency financial federalism: (a) Article 354: During National Emergency, President may modify financial distribution between Union and States (tax devolution, grants-in-aid) as provided in Part XII Chapter I, (b) Procedure: Presidential order subject to approval by Parliament (simple majority), (c) Rationale: Enable flexible resource allocation during crisis (e.g., defense spending, disaster relief) while maintaining legislative oversight, (d) Limits: (i) Modifications temporary; revert to normal distribution post-Emergency, (ii) Cannot violate basic structure (federal balance), (iii) Subject to judicial review for constitutional compliance, (e) Historical note: Used during 1962, 1971 Emergencies for defense financing; not invoked during 1975 Emergency for political purposes. Illustrates fiscal federalism adaptability: crisis-responsive resource allocation within democratic safeguards.

Topic Emergency Powers - Article 354 Financial Modifications
Exam Relevance Emergency financial provisions critical for UPSC Mains and advanced SSC exams
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