General Knowledge Quiz: Financial Emergency in India

There is a lot of financial turmoil in India due to Coronavirus. All MPs and officials are voluntarily donating their salaries to the consolidated fund of India. Some people are predicting for the declaration of financial emergency in the country. This topic is very important for various competitive exams as well. Hence we have published a GK quiz on financial emergency in India.

This set of 11 questions based on a financial emergency in India will be very useful for various competitive exams. Solve it and assess your preparation.

1. Who can declare a financial emergency in the country?
(a) Finance Minister of India
(b) President of India
(c) Lok Sabha Speaker 
(d) Chief Justice of Supreme Court
Answer: B
Explanation: The President of India has the power to declare a financial emergency in view of the financial situation of the country, but for this declaration the approval of the cabinet is necessary.

2. Which part of the Indian Constitution has emergency provisions?

(a) XVIII
(b) XVI
(c) XVII
(d) XV
Answer: a
Explanation: Part XVIII of the Indian Constitution contains emergency provisions from Articles 352 to 360. Article 352 is related to a national emergency.

3. Which article of the Indian Constitution has provisions for a financial emergency?

(a) Article 352
(b) Article 356
(c) Article 360
(d) None of the above
Answer: c
Explanation: Article 352 has provisions for a national emergency, article 356 related to President's rule in the state and article 360 ​​envisages financial emergency in the country.

4. When was the National Emergency first declared in India?

(a) 1965
(b) 1991
(c) 1975
(d) Never.
Answer: d
Explanation: National Emergency has not been imposed in India even once. Although the economic situation was much worse in 1991, but a financial emergency was not imposed.

5. Which of the following statements is not correct in relation to the financial emergency?

(a) The declaration of financial emergency requires the approval of both houses of parliament.
(b) The resolution approving the declaration of financial emergency should be passed by a special majority by either House of Parliament.
(c) Once approved by both houses of parliament, the financial emergency continues indefinitely, until it is revoked by the President.
(d) The declaration of financial emergency can be cancelled by the President at any time. Such a proclamation does not require parliamentary approval.
Answer: B

Explanation: The resolution approving the declaration of financial emergency should be passed by any House of Parliament not by a 'special majority' but only by a 'simple majority'.

6. Under which circumstances can a financial emergency be declared?
i. At the time of financial stability in the country
ii. In case of threat to India's financial stability or any part of its territory

(a) only i
(b) only ii
(c) In case of both i, ii
(d) i, ii not both
Answer: c
Explanation: If the President of India feels that a situation has arisen in the country due to which the financial stability of India, the credibility of India or the financial stability of any part of its territory is threatened, then he shall declare financial emergency on the advice of the cabinet.

7. Which of the following is not correctly matched?
 (a) Article 352: National Emergency
(b) Article 368: Constitutional amendment
(c) Article 356: Emergency in the state (President's rule)
(d) Article 358: Financial emergency in the country
Answer: D
Explanation: Article 358 of the Constitution of India related to the suspension of the provisions of Article 19 during the emergency and not to the financial emergency in the country. Article 360 is related to Financial emergency in the country.

8. Which of the following constitutional amendment has empowered the President to declare a national emergency on a particular part of India?

(a) 38th

(b) 40th

(c) 42nd

(d) 62nd

answer :c
Explanation: On the basis of the 42nd Constitutional Amendment, the President was empowered to declare the National Emergency in the entire country or only a part of it.

9. Which of the following is not the effect of the financial emergency?
(a) During the financial emergency, the executive authority of the center gets expanded and it can give financial orders to any state according to its own.
(b) Salaries and allowances of all or any class of persons serving in the state can not be reduced.
(c) All money bills or other financial bills that come up for the consideration of the President after the passage by the state legislature can be reserved.
(d) The President can reduce the salary of judges of the Supreme Court and High Court.
Answer: b
Explanation: The salary and allowances can be reduced by the President for all persons or classes employed in the state because the executive powers of the center expand during the financial emergency and it can give financial orders to any state according to his own.

10. A proclamation of financial emergency must be approved by both the Houses of Parliament within ....... from the date of its issue.
(a) 2 months
(b) 3 months
(c) 6 months
(d) 6 weeks
Answer: a
Explanation: A proclamation of financial emergency must be approved by both the Houses of Parliament within two months from the date of its issue.

11. Emergency Provisions in the Indian Constitution are derived from the Constitution of …….
(a) Germany
(b) America
(c) Canada
(d) Britain
Answer: a
Explanation: Emergency provisions in the Indian constitution are taken from the constitution of Germany. The Constitution of India envisages three types of emergencies.