Presidential Power to Modify Union-State Revenue Sharing During Emergency
Official heading: “Application of provisions relating to distribution of revenues while a Proclamation of Emergency is in operation”
- Source edition
- The Constitution of India (as on 1 May 2026)
- Source locator
- Part XVIII, Article 354, printed page 211
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1. In One Sentence
Authorizes the President to modify the constitutional distribution of financial revenues between the Union and States during a National Emergency.
2. What It Means in Everyday Language
Article 354 enables the Union Government to reprioritize public finances during a national security crisis.
While a Proclamation of Emergency is in operation, the President may by order direct that all or any of the revenue-sharing provisions (Articles 268 to 279, governing tax devolution and grants) shall have effect subject to specified exceptions or modifications.
This allows the Union to retain greater financial resources for defense, wartime logistics, and national rehabilitation.
Every such financial order must be laid before each House of Parliament as soon as possible, and cannot extend beyond the financial year in which the Emergency ceases to operate.
3. Practical Illustrative Example
During wartime, the President orders a temporary reduction in statutory central tax devolution to States to fund emergency national defense expenditures.
4. Important Limits, Qualifications & Exceptions
Article 354 grants financial flexibility to the Union during national security emergencies.
- Revenue distribution modification: Covers Articles 268 to 279 (tax devolution, duties, and grants-in-aid).
- Parliamentary scrutiny: Any presidential financial modification order must be laid before both Houses of Parliament.
- Temporal ceiling: Automatically expires at the close of the financial year in which the Emergency terminates.
5. Operative Constitutional Text
6. Sources & Historical Assembly Deliberations
Assembly quotations are withheld until wording, dates, and attribution have been checked against the primary record.
- •Government of India (Legislative Department, Ministry of Law and Justice) • Part XVIII, Article 354, printed page 211 • Human source-link check pending
Primary PDF accessed and transcribed with AI assistance on 14 October 2026. Formatting and amendment annotation markers are omitted; operative wording is retained. This is not human legal review. Later amendments and commencement notifications have not been comprehensively checked.