An emergency under Article 352 of the Constitution of India can be declared only during:

Under Article 352 of the Constitution of India, a National Emergency can be proclaimed by the President when the security of India or any part of its territory is threatened by war, external aggression, or armed rebellion [4]. Originally, the Constitution used the term 'internal disturbance' as the third ground for emergency [3]. However, following the misuse of this provision during the 1975 emergency, the 44th Constitutional Amendment Act of 1978 replaced 'internal disturbance' with 'armed rebellion' to prevent future abuse [1]. Option 3 refers to the 'Failure of Constitutional Machinery in the State,' which is the ground for President's Rule under Article 356 [4]. Option 4 refers to 'Financial instability,' which is the ground for a Financial Emergency under Article 360. Therefore, the current valid grounds under Article 352 are war, external aggression, or armed rebellion.

Sources

1. [1] Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 28: EMERGENCY PROVISIONS > EMERGENCY PROVISIONS > p. 411
2. [2] Indian Polity, M. Laxmikanth(7th ed.) > Chapter 17: Emergency Provisions > Grounds of Declaration > p. 173
3. [4] Indian Polity, M. Laxmikanth(7th ed.) > Chapter 17: Emergency Provisions > Consequences of President's Rule > p. 180
4. [3] https://repository.nls.ac.in/cgi/viewcontent.cgi?article=1156&context=nlsir