Urban Local Bodies

Urban Local Bodies

Urban Local Bodies


The 74th Amendment to the Indian Constitution established Urban Local Bodies. These reforms brought a significant transformation in the operation of Urban Governance. This was done by decentralizing decision-making power from the Central Government to the local authorities. 

74th Amendment Act 1992

  • The act granted municipalities constitutional status. It has brought them under the purview of the Constitution’s justiciable provisions.
  • This act added Part IX-A to the COI which contained provisions from Articles 243P to 243ZG.
  • It also added the 12th schedule to the COI containing 18 functional items which are to be placed within the purview of municipalities.

Salient Features of the 74th Amendment Act 1992

  • Article 243Q of the COI deals with the Constitution of Municipalities i.e., Nagar Panchayat, Municipal Council, and Municipal Corporation.
  • Article 243R deals with the Composition of Municipalities; it states that all of its members are directly elected by the people of the Municipal area which is divided into territorial constituencies known as wards.
  • Article 243S talks about the constitution and composition of ward committees consisting of wards and members of wards who represent that ward in the Municipality.
  • Article 243 T deals with the reservation of seats in every Municipality. It states that –
    • Reservation of seats for Schedule Castes and Schedule Tribes is provided in every municipality in proportion to their population.
    • Provision for reservation of 1/3rd of the total number of seats is also provided for women.
    • The State legislature has been empowered to make any provision for reservation in the municipality at any level in favor of the backward class.
  • Article 243U deals with the duration of Municipalities. It states that –
    • Municipalities have been provided with a five-year term of office at every level. It can however be dissolved before the completion of its term.
    • A municipality, if elected after the dissolution of the municipality, shall continue for the remaining period for which the dissolved municipality would have continued had it not been dissolved.
  • Article 243V talks about the grounds for disqualification of members of the Municipality. It states that a person shall be disqualified on the following grounds:
    • If he is disqualified under any law for the time being in force for the purposes of elections to the legislature of the state concerned; or
    • If he is disqualified under any law made by the State legislature.
    • 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.
  • Article 243W deals with the powers, authorities, and responsibilities of municipalities that include urban planning, financial and social development, and so on.
  • Article 243X states that the COI has left it open to the Legislature of a State to specify by law matters relating to the imposition of taxes.
  • Article 243Y provides for the constitution of the Finance Commission which will give its opinion on the distribution of finances between the State and the municipality and will determine the aid subsidies.
  • Article 243ZA provides for the establishment of a State Election Commission, independent of Election Commission of India, which conducts elections for every Municipal Corporation for a term of 5 years.
  • Article 243ZC says that provisions of part IXA are not applicable to Scheduled Areas referred to in Article 244.
    • These include Assam, Meghalaya, Tripura, and Mizoram. It is also not applicable to the area under Darjeeling Gorkha Hill Council.
  • Article 243 ZE says that there will be a Metropolitan Planning Committee in every Metropolitan region to set up a draft improvement plan for the Metropolitan region overall.
    • A Metropolitan area means an area having a population of 10 lakh or more, in one or more districts, and consisting of two or more municipalities or panchayats or other contiguous areas.
  • Bar to Interference by Courts in Electoral Matters
    • The act prohibits courts from interfering in municipality elections.
    • It also states that no election to a municipality may be challenged unless accompanied by an election petition filed with the appropriate authority and in the manner prescribed by the state legislature.

Structure of Urban Local Government in India

The Urban Local Government consists of eight types of Urban local bodies.

Municipal Corporation:

Municipal corporations are usually found in big cities such as Bangalore, Delhi, Mumbai, Kolkata, etc.


  • The smaller cities tend to have the provision of municipalities.
  • The Municipalities are often called upon by other names such as the municipal council, municipal committee, municipal board, etc.

Notified Area Committee:

  • Notified area committees are set up for the fast-developing towns and the towns lacking the basic amenities.
  • The state government nominates all the members of the notified area committee.

Town Area Committee:

  • The town area committee is found in the small towns.
  • It has minimal authority such as street lighting, drainage roads, and conservancy.

Cantonment Board:

  • It is usually set up for a civilian population living in the cantonment area.
  • It is created and run by the central government.


  • Township is another form of urban government to provides basic facilities to the staff and workers living in the colonies established near the plant.
  • It has no elected members and is merely an extension of the bureaucratic structure.

Port Trust

  • Port trusts are established in the port areas such as Mumbai, Chennai, Kolkata, etc.
  • It manages and takes care of the port.
  • It also provides basic civic amenities to the people living in that area.

Special Purpose Agency:

These agencies undertake the designated activities or specific functions belonging to the municipal corporations or municipalities.

Problems Faced by Urban Local Bodies

Financial Paucity:

  • Financial stringency has become the biggest hurdle in good governance at ground level.
  • Dependence on Intergovernmental Transfers: The Urban local government heavily depends on the state governments for getting grants-in-aid out of the consolidated fund of the state.
  • Acute Share in Revenue: Generally, their source of income is inadequate as compared to their functions. Their chief sources of income are the varied types of taxes.
  • However, taxes collected by the urban bodies are not sufficient to cover the expenses of the services provided.
  • Though they can impose certain new taxes, the elected members of these local bodies hesitate in doing so for fear of displeasing their electorate.

Unplanned Urbanisation:

  • In the absence of proper planning, the Municipal Services find it difficult to cope with the increasing needs of the population, both qualitatively and quantitatively.
  • The administrative machinery of local bodies is insufficient. Judicious use of land is not being made, colonies are set up without proper facilities such as schools, parks, and hospitals, the growth of slums is not checked, and traffic congestion.
  • This also leads to urban poverty, unemployment, and ecological degradation.

Excessive Control of State Government:

  • The State Government takes control of the Urban local bodies which are legislative, administrative, judicial, and financial keeping urban municipal governments subordinate units rather than functioning as institutions of self-governance.
  • Municipalities need to balance their budgets, by law, and any municipal borrowing has to be approved by the state government.
  • Unlike the Centre and the States, no distinction is made between revenue expenditure and capital expenditure at the Urban Local Government level.

Multiplicity of Agencies:

  • Formation of single-purpose agencies under the direct supervision of the state government and without any accountability towards urban local government. The municipal bodies have to contribute to the budget of these agencies while having no control over them.
  • Example: State Transport Corporation, State Electricity Board, Water Supply Department, etc.

Low level of People’s Participation:

  • Despite a relatively higher level of literacy and educational standard, city dwellers do not take adequate interest in the functioning of the urban government bodies.
  • The multiplicity of special purpose agencies and other urban bodies confuses the public about their role boundaries.

Related Links:

Panchayati Raj Institution (PRI)73rd and 74th Constitutional Amendment
Election Commission of IndiaLokpal and Lokayukta