Introduction: Architects of Urban Governance
The 74th Constitutional Amendment Act of 1992 stands as a landmark legislation that revolutionized urban governance in India by granting constitutional status to Urban Local Bodies (ULBs). Complementing the 73rd Amendment for rural local self-governance, this Act added Part IX-A ("The Municipalities") and the Twelfth Schedule to the Constitution, institutionalizing municipal governance.
It mandates a uniform structure for urban local bodies, ensures regular elections, provides for reservations for women and marginalized communities, and establishes independent electoral and financial commissions. This Act is crucial for fostering grassroots democracy in urban areas and enabling ULBs to effectively manage the complex challenges of rapid urbanization.
6.3.1: Significance and Objectives of 74th Amendment
Constitutional Status
Gave constitutional status and protection to urban local bodies, making them integral to the democratic framework.
Added Part IX-A & Twelfth Schedule
Inserted "The Municipalities" (243-P to 243-ZG) and 18 functional items for ULBs.
Democratic Decentralization
Strengthened grassroots democracy by empowering ULBs as institutions of self-government.
Regular Elections & Representation
Ensured timely elections and adequate representation for weaker sections (SC/ST/Women).
Urban Planning & Justice
Promoted planning for economic development and social justice at the urban level.
Uniform Structure & Autonomy
Provided a uniform structure and greater autonomy to tackle rapid urbanization challenges.
6.3.2: Salient Features of the 74th Amendment Act
Article 243Q: Constitution of Municipalities
Mandates the constitution of three types of Municipalities based on the area's transition or size, with criteria determined by the Governor:
Nagar Panchayat
For a transitional area (an area in transition from a rural to an urban area).
Municipal Council
For a smaller urban area.
Municipal Corporation
For a larger urban area.
Art 243Q
Article 243R: Composition
- All seats filled by direct election from territorial constituencies (Wards).
- State Legislature may provide for representation of persons with special knowledge/experience (without voting rights), MPs/MLAs/MLCs, and Chairpersons of Ward Committees.
- Manner of election of Chairperson determined by State Legislature.
Art 243R
Article 243S: Wards Committees
Mandatory in a Municipality having a population of 3 lakhs (300,000) or more.
State Legislature to make provisions for composition, area, and manner of filling seats.
Art 243S
Article 243T: Reservation of Seats
SCs/STs:
Seats reserved in proportion to their population.
Women:
Not less than one-third (1/3rd) of the total seats reserved (including SC/ST women). Offices of chairpersons also reserved proportionally.
Backward Classes (OBCs):
State Legislature has the discretion to make provisions for reservation.
Art 243T
Article 243U: Duration
- Every Municipality continues for 5 years from its first meeting.
- Elections must be completed before expiry of term OR within 6 months of premature dissolution.
- Reconstituted Municipality (after premature dissolution) continues only for remainder of original term.
Art 243U
Article 243V: Disqualifications
- Similar to Panchayats (Article 243F).
- Minimum age for contesting municipal elections is 21 years.
Art 243V
Article 243ZA: State Election Commission
Superintendence, direction, and control of electoral rolls and conduct of all elections to Municipalities vested in the State Election Commission (SEC) (Article 243K).
The same independent SEC that conducts Panchayat elections also conducts municipal elections.
Art 243ZA
Article 243W: Powers, Authority, and Responsibilities
Empowers the State Legislature to endow Municipalities with powers and authority necessary to function as institutions of self-government, including:
- Preparation of plans for economic development and social justice.
- Implementation of schemes, including those related to the 18 matters listed in the Twelfth Schedule.
The Twelfth Schedule: 18 Functional Items
Urban planning
Land use & building construction
Roads and bridges
Water supply
Public health & sanitation
Fire services
Urban forestry & environment
Slum improvement & upgradation
Urban poverty alleviation
Urban amenities & facilities
Cremation grounds
Cattle ponds
Vital statistics
Street lighting
Parking lots & bus stops
Regulation of slaughterhouses
Art 243W, Twelfth Schedule
Finances: Article 243X & 243Y
Powers to levy taxes (Art 243X)
State Legislature can authorize Municipalities to levy, collect, and appropriate taxes, duties, tolls, and fees. It can also assign state taxes, duties, etc., to Municipalities and provide for grants-in-aid from the Consolidated Fund of the State.
State Finance Commission (SFC) (Art 243Y)
The SFC (constituted under Article 243-I for Panchayats) reviews the financial position of Municipalities and makes recommendations to the Governor regarding their financial matters.
Art 243X, 243Y
Integrated Planning Bodies: DPC & MPC
District Planning Committee (DPC)
Mandate (Art 243ZD): Consolidate plans from Panchayats & Municipalities for district development.
Composition: At least 4/5th elected by and from members of District Panchayat & Municipalities, proportionate to rural/urban population.
Metropolitan Planning Committee (MPC)
Mandate (Art 243ZE): For metropolitan areas (population ≥ 10 lakhs) to prepare a draft development plan for the entire area.
Composition: At least 2/3rd elected by and from members of Municipalities & Panchayats in the metropolitan area, proportionate to population.
Art 243ZD, 243ZE
Other Key Provisions
- Article 243Z (Audit): State Legislature may make provisions for maintenance and auditing of accounts.
- Article 243ZB (Application to UTs): Provisions apply to Union Territories as the President may direct.
- Article 243ZC (Exempted Areas): Does not apply to Scheduled Areas (Fifth Schedule) and Tribal Areas (Sixth Schedule), nor affects Darjeeling Gorkha Hill Council.
- Article 243ZG (Bar to Court Interference): Prohibits courts from interfering in electoral matters of Municipalities.
Arts 243Z, 243ZB, 243ZC, 243ZG
6.3.3: Other Types of Urban Local Bodies (Administrative Structure)
Apart from the three types of Municipalities mandated by the 74th Amendment, states have created other types of ULBs based on local conditions and administrative needs. Click to explore:
Municipal Corporation
- Area: For large cities like Delhi, Mumbai, Kolkata, Chennai.
- Head: Headed by a Mayor (elected mostly indirectly, but some states directly elected).
- Chief Executive: The Municipal Commissioner (appointed by the state government) is the chief executive officer, generally an IAS officer.
Municipality / Municipal Council
- Area: For smaller cities and towns.
- Head: Headed by a President or Chairman (elected either directly or indirectly).
- Chief Executive: The Chief Executive Officer/Chief Municipal Officer (appointed by the state government) is the chief executive.
Notified Area Committee
- Area: For a fast-developing town not yet meeting municipality criteria, or a town of special importance.
- Nature: Entirely a nominated body, consisting of government-appointed members.
- Statutory Backing: Not a statutory body created by an Act of Parliament/State Legislature; created by a notification.
Town Area Committee
- Area: Established for the administration of a small town.
- Nature: A semi-municipal authority, performing limited civic functions.
- Creation: Created by a separate Act of the State Legislature.
- Composition: May be wholly elected, wholly nominated, or partly elected and partly nominated.
Cantonment Board
- Area: For municipal administration for civilian population in cantonment areas (military quarters).
- Administration: Administered by the Central Government (Ministry of Defence).
- Creation: Created by the Cantonments Act, 2006 (a Central Act).
- Composition: Partly elected and partly nominated members (ex-officio military officers). Station Commander is ex-officio president.
Township
- Area: Established by large public enterprises to provide civic amenities to their staff and workers.
- Administration: Administered by the enterprise itself, with appointed staff.
- Nature: Not an elected body.
Port Trust
- Area: Established in port areas (e.g., Mumbai, Kolkata, Chennai).
- Purpose: To manage and protect the ports.
- Creation: Created by an Act of Parliament.
- Composition: Consists of both nominated and elected members.
Special Purpose Agency (SPA)
- Nature: Function-based bodies undertaking specific urban administration activities (e.g., Housing Boards, Water Supply Boards, Urban Development Authorities).
- Impact: Operate independently, often leading to fragmentation of urban governance and coordination issues, not subordinate to ULBs.
6.3.4: Functioning of ULBs – Issues, Challenges, and Reforms
Financial Weakness
- Poor Revenue Generation & Limited Tax Base (over-reliance on property tax).
- Heavy Dependence on State Grants (unpredictable, insufficient).
- SFC Recommendations often not fully implemented.
Limited Functional Devolution
- Slow and selective devolution of 18 functional items.
- Encroachment by Parastatals/SPAs: Undermines ULB authority, fragments governance.
Administrative Weaknesses
- Shortage of Qualified Staff & Weak Institutional Capacity.
- Lack of Planning Expertise.
- Frequent Political Interference from state governments.
Weak Citizen Participation
- Weak Ward Committees limiting direct citizen engagement.
- Low citizen awareness and engagement in municipal affairs.
Challenges of Rapid Urbanization
- Growth of slums & informal settlements.
- Severe traffic congestion.
- Environmental pollution.
- Ineffective solid waste management.
- Inadequate water supply & sanitation infrastructure.
- Housing shortage.
Reforms and Way Forward
Financial Reforms
- Strengthening SFCs & implementing recommendations.
- Encouraging Municipal Bonds (e.g., Ghaziabad, Indore, Bengaluru).
- Promoting Public-Private Partnership (PPP) Models.
Governance & Capacity Building
- Capacity Building: Training for ULB staff & representatives.
- E-governance in Municipalities: Digital platforms for services (tax, approvals).
- Central Schemes: AMRUT, Smart Cities, Swachh Bharat Mission-Urban.
Debate: Mayor-in-Council vs. Commissioner System
Mayor-in-Council System
Mayor and a Council of Ministers (elected from councillors) form the executive, similar to a cabinet. Provides greater accountability and power to the elected wing (e.g., Kolkata Corporation).
Commissioner System
Municipal Commissioner (appointed by state government) is the chief executive. Mayor is largely ceremonial. Predominant system, often leads to bureaucratic dominance.
The debate centers on empowering the Mayor and the elected wing versus relying on a bureaucracy-led system, with calls for Mayors to have more executive powers and fixed tenure.
6.3.5: Central Council of Local Government
Established in 1954 by an order of the President under Article 263 of the Constitution (Inter-State Councils).
It is an advisory body composed of the Union Minister for Urban Development (who chairs it) and the Ministers for Local Self-Government in the states.
Functions: To recommend policies for urban local bodies, discuss common policy matters, and facilitate coordination between the Centre and states on local governance issues.
UPSC Examination Focus
Prelims MCQs
UPSC CSE 2023: Electoral Laws (General relevance)
Consider the following statements:
- In India, there is no law from restricting the candidates from contesting in any one Lok Sabha election from three constituencies.
- As per existing rules, if a candidate contests in one Lok Sabha election from many constituencies, his political party should bear the cost of by-elections in the constituencies vacated by him in the event of him winning from more than one constituency.
Which of the statements given above is/are correct?
- (a) 1 only
- (b) 2 only
- (c) Both 1 and 2
- (d) Neither 1 nor 2
Answer: (d)
Hint: This question tests general electoral laws, which are applicable to local bodies as well (conducted by SEC). Statement 1 is incorrect (restriction to 2 constituencies). Statement 2 is incorrect (no such rule).
UPSC CSE 2017: 73rd Constitutional Amendment Act
Which of the following statements is/are correct regarding the 73rd Constitutional Amendment Act, 1992?
- It mandates a three-tier system of Panchayats for all States.
- It reserves one-third of the total seats for women in all Panchayats.
- It makes the constitution of a State Election Commission mandatory for conducting Panchayat elections.
Select the correct answer using the code given below:
- (a) 1 only
- (b) 1 and 2 only
- (c) 2 and 3 only
- (d) 1, 2 and 3
Answer: (c)
Hint: This question is on the 73rd Amendment, but the 74th Amendment (ULBs) has many parallel features (e.g., reservation, SEC). Statement 1 is incorrect (flexibility for states < 20 lakh). Statements 2 and 3 are correct.
UPSC CSE 2016: Compulsory Provision (73rd Amendment)
Which of the following is not a compulsory provision of the 73rd Constitutional Amendment Act?
- (a) Organization of Gram Sabha
- (b) Reservation of seats for backward classes
- (c) Direct election to all seats in Panchayats
- (d) Fixed tenure of five years for Panchayats
Answer: (b)
Hint: This question is on the 73rd Amendment. The concept of compulsory vs. voluntary provisions is common for both 73rd and 74th Amendments. Reservation for backward classes is voluntary.
Mains Questions & Trend Analysis
Trend Analysis
- Prelims: Focus on Salient Features (types, reservations, SEC/SFC, 18 subjects, DPC/MPC). Detailed factual questions on specialized ULBs (Cantonment Boards, Notified Area Committees, SPAs).
- Mains: Analytical questions on transformation by 74th Amendment and persistent challenges (financial, functional, administrative). Fragmentation by SPAs is a key point. Urbanization challenges and role of planning bodies are important. Reforms and current affairs linkages (Smart Cities, Municipal Bonds) are often tested.
UPSC CSE 2019: Evolution & Challenges of Local Self-Government
"The local self-government system in India has evolved from a purely administrative structure to a more democratic and participatory one. Discuss how the 73rd and 74th Constitutional Amendments have transformed it, while also highlighting the challenges in its effective functioning." (15 marks)
Direction: Direct, comprehensive question. Discuss transformation (constitutional status, regular elections, reservations, SEC, SFC, DPC, MPC) and then detail challenges (financial, functional, administrative, fragmentation by SPAs, citizen participation, rapid urbanization).
UPSC CSE 2017: Role of PRIs (Parallel to ULBs)
"Critically examine the role of the Panchayati Raj Institutions in strengthening grassroots democracy in India." (10 marks)
Direction: While focusing on PRIs, draw parallels with ULBs' successes (democratic participation, empowerment) and challenges (financial constraints, devolution issues, administrative capacity).
UPSC CSE 2015: Decentralization - Mixed Bag
"The process of decentralization in India has been a mixed bag, with successes in empowering local bodies but persistent challenges in ensuring their effective functioning." Discuss. (12.5 marks)
Direction: Explicitly calls for discussion of both PRIs (73rd Amendment) and ULBs (74th Amendment). For ULBs, highlight successes (constitutional status, regular elections, representation) and major challenges (financial, functional, fragmentation by SPAs, administrative, rapid urbanization).