Part XVIII - Emergency Provisions • Article

Article 354 Simplified: Application of provisions relating to distribution of revenues while a Proclamation of Emergency is in operation

Article 354 deals with application of provisions relating to distribution of revenues while a proclamation of emergency is in operation. It clarifies how public money, taxes, duties, grants, exemptions, proceeds, accounts, or government assets are handled between the Union, States, and public funds.

Official Text

(1) The President may, while a Proclamation of Emergency is in operation, by order direct that all or any of the provisions of articles 268 to 279 shall for such period, not extending in any case beyond the expiration of the financial year in which such Proclamation ceases to operate, as may be specified in the order, have effect subject to such exceptions or modifications as he thinks fit. (2) Every order made under clause (1) shall, as soon as may be after it is made, be laid before each House of Parliament.

Simple Meaning

Explain Like Ten

During an emergency, the President can decide to keep more tax money at the center to pay for defense and give less money to the states. This order must be shown to Parliament.

Student Mode

Authorizes the President to suspend or modify the operation of Articles 268 to 279 (which regulate the distribution of tax revenues, financial grants, and resources between the Union and States). Any such presidential order can last no longer than the end of the financial year in which the emergency ceases, and must be laid before both Houses of Parliament.

Example

When a tax is collected by one level of government but belongs to another, or when public money must be credited, distributed, audited, exempted, or granted, Article 354 helps decide the constitutional route.

Key Takeaway

Article 354 is part of the Constitution's public finance and accountability framework.

FAQs

What is the purpose of Article 354?

To ensure that during a major national crisis, the financial resources of the entire nation can be consolidated and directed by the Central Government towards national defense and security, overriding normal federal revenue-sharing agreements.

How long can a financial modification order under Article 354 remain in force?

It can extend up to, but not beyond, the expiration of the financial year in which the Proclamation of Emergency ceases to operate.

Quiz

Who is empowered to modify the distribution of revenues between the Union and States during an emergency under Article 354?

Answer: The President of India

Any order made by the President under Article 354 must be laid before:

Answer: Each House of Parliament