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74th Amendment Act of 1992

The 74th Amendment Act gave Constitutional status to the Municipalities. It has brought them under the purview of the justiciable part of the Constitution. In other words, the state governments are under constitutional obligation to adopt the new system of municipalities in accordance with the provisions of the Act.


  1. All the members of a municipality shall be elected directly by the people of the municipal area.
  2. For this purpose, each municipal area shall be divided into territorial constituencies to be known as wards.
  3. The state legislature may provide the manner of election of the chairperson of a municipality. It may also provide for the representation of the following persons in a municipality
  4. Persons having special knowledge or experience in municipal administration without the right to vote in the meetings of municipality.
  5. The members of the Lok Sabha and the state Legislative Assembly representing constituencies which comprise wholly or partly the municipal area.
  6. The members of the Rajya Sabha and the State Legislative CouncilØ registered as electors within the municipal area.

Wards Committees

  1. There shall be constituted a wards committee, consisting of one or more wards, within the territorial area of a municipality having population of three lakhs or more.
  2. The state legislature may make provision with respect to the composition and the territorial area of a Wards Committee and the manner in which the seats in a wards committee shall be filled.
  3. It may also make any provision for the constitution of committees in addition to the wards committees.

Reservation of Seats

  1. There shall be provisions for the reservation of seats for the scheduled castes and the scheduled tribes in every municipality in proportion of their population to the total population in the municipal area.
  2. Further, there shall be the reservation of not less that one-third of the total number of seats for women (including the number of seats reserved for women belonging to the SCs and STs).
  3. The state legislature may provide for the manner of reservation of offices of chairpersons in the municipalities for the SCs, the STs and the women.
  4. It may also make any provision for the reservation of seats in any municipality or offices of chairpersons in municipalities in favour of backward classes.

Duration of Municipalities

  1. There shall be a five-year term of office for every municipality.
  2. However, it can be dissolved before the completion of its term.
  3. Further, the fresh election to constitute a municipality shall be completed:
  4. Before the expiry of its duration of five years.
  5. In case of dissolution, before the expiry of a period of six months form the data of its dissolution.



  1. A person shall be disqualified for being chosen as or for being a member of a municipality if he is so disqualified:
    1. Under any law for the time being in force for the purposes of elections to the Legislature of the state concerned; or
    2. Under any law made by the state legislature.
  2. However, no person shall be disqualified on the ground that he is less than 25 years of age if he has attained the age of 21 years.
  3. Further, all questions of disqualifications shall be referred to such authority as the state legislature determines.

State Election Commission

  1. The superintendence, direction and control of the preparation of electoral rolls and the conduct of all elections to the municipalities shall be vested in the State Election Commission.


The state legislature may:

  1. Authorize a municipality to levy, collect and appropriate taxes, duties, tools and fees;
  2. Assign to a municipality taxes, duties, tools and fees levied and collected by state government;
  3. Provide for making grants-in-aid to the municipalities from the Consolidated Fund of the state; and
  4. Provide for constitution of funds for crediting all moneys of the municipalities.


The Twelfth schedule contains the following 18 functional items placed within the purview of municipalities:

  1. Urban planning, including town planning.
  2. Regulation of land use and construction of buildings.
  3. Planning for economic and social development.
  4. Roads and bridges.
  5. Water supply for domestic, industrial and commercial purposes.
  6. Public health, sanitation, conservancy and solid waste management.
  7. Fire services.
  8. Urban forestry, protection of the environment and promotion of ecological aspects.
  9. Safeguarding the interests of weaker section of society, including the handicapped and mentally retarded.
  10. Slum improvement and upgradation.
  11. Urban poverty alleviation.
  12. Provision of urban amenities and facilities such as parks, gardens, playgrounds.
  13. Promotion of cultural, educational and aesthetic aspects.
  14. Burials and burial grounds, cremations, cremation grounds and electric crematoriums.
  15. Cattle ponds, prevention of cruelty to animals.
  16. Vital statistics including registration of births and deaths.
  17. Public amenities including street lighting, parking lots, bus stops and public conveniences.
  18. Regulation of slaughter houses and tanneries.

The 74th Constitutional Amendment Act and the various follow up actions including the reforms towards effective implementation of provisions of the 74th Constitutional Amendment, have given wide ranging responsibilities and functions to the Urban Local Bodies (ULB) and their elected representatives.

Important Points

  1. The representatives in Urban Local Bodies have been elected from all sections of the communities to make the urban governance broad based and more representatives required proper understanding of different provisions of acts, rules, regulations and procedures to discharge their duties and responsibilities with cooperation and coordination of concerned executives for efficient urban governance. The constitution provides for reservation of seats in order to give due representation to the weaker section and special groups.
  2. Urban Decentralization needs to empower Urban Local Bodies with many more power and functions to operate as independent levels of government.
  3. Such increased autonomy also needs to be complemented by appropriate accountability. This accountability needs to be directly to the citizens themselves, rather than to another level of government. Hence, formal mechanisms for such citizen-centric accountability need to be created, along with reforms in urban decentralization.
  4. From the citizens’ perspective, there need to be more opportunities to participate in local governance at many levels: in budgeting, planning, land use and zoning issues, and so on. Creating this opportunity to participate also complements the accountability issue mentioned above.
  5. A consistent mechanism for participation, planning and decentralization across urban local governments will enables easier coordination at the regional planning level, through the District Planning Committees and Metropolitan Planning Committees that have been envisaged in the Constitution
  6. Strong accountability mechanisms are also required on financial and operational management of the Urban Local Bodies: budgeting, audits, presentation of financial statements to the public, performance measurement indicators and so on. Here again, the primary focus of these instruments needs to be citizens and users of public services, rather than other levels of government: i.e., accountability outward to citizens, rather than inward within government.

Composition of District Planning Committee (DPC)

The DPC is generally composed of elected members of the local bodies within the district, both rural and urban, as well as some nominated members.

The number of members varies with the population size of the districts. The ratio of members from Panchayats and ULBs is based on the ratio in which the population of the district is divided between rural and urban areas.

An examination of the composition of the DPCs is vital from two perspectives:

  1. It reflects the degree of inclusion of marginalised sections in the districtv planning process;
  2. It reflects the degree to which the DPC is actually a body independent ofv state control and interference.

There is no uniformity of agencies supervising DPC elections across states, and this is not desirable if DPCs are to be uniformly elected structures across states.

The State Election Commissions (SECs) are the most desirable agencies for conducting DPC elections, as they are expected to be most impartial. In Kerala, in fact, DPC elections are synchronised with local government elections.

Composition of elected and nominated members

The DPCs are to have at least four-fifths elected members as per Article 243 ZD. Members should be elected by, and from amongst, the elected members of the Panchayat at the district level and of the Municipalities in the district in proportion to the ratio between the population of the rural areas and of the urban areas in the district.

The actual pattern, however, varies across states. Nominated members usually represent the State & Central Government agencies (including line departments).

A larger proportion of nominated members could imply greater interference and control a in DPC functioning by the State and Central administration. This in effect erodes the participative nature of the Committee, reducing it to just another arm of the State administration.

It is therefore not desirable that the proportion of nominated members increase beyond the constitutionally stipulated limit.

Finance Commission to review the financial position of the Panchayats

Article 243I of the Indian Constitution prescribes that the Governor of a State shall, as soon as may be within one year from the commencement of the Constitution (Seventy-third Amendment) Act, 1992, and thereafter at the expiration of every fifth year, constitute a Finance Commission to review the financial position of the Panchayats and to make recommendations to the Governor as to:

  1. The distribution between the State and the Panchayats of the net proceeds of the taxes, duties, tolls and fees leviable by the State, which may be divided between them and the allocation between the Panchayats at all levels of their respective shares of such proceeds.
  2. The determination of the taxes, duties, tolls and fees which may be assigned as, or appropriated by the Panchayats.
  3. The grants-in-aid to the Panchayats from the Consolidated Fund of the State.
  4. The measures needed to improve the financial position of the Panchayats.
  5. Any other matter referred to the Finance Commission by the Governor in the interests of sound finance of the Panchayats.

Article 243Y of the Constitution further provides that the Finance Commission constituted under Article 243 I shall make similar recommendation vis-a-vis municipalities.

The Governor is required to cause every recommendation made by the State Finance Commission together with an explanatory memorandum as to the action taken to be laid before the Legislature of the State.

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