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Salient Features Of 74th Amendment Act

The Constitution (Seventy-First Amendment) Act of 1992 added a new Part IXA to the Constitution, which includes articles.....Salient Features Of 74th Amendment Act

The Constitution (Seventy-First Amendment) Act of 1992 added a new Part IXA to the Constitution, which includes articles 243 P to 243 ZG that deal with municipalities. On June 1, 1993, this modification, commonly known as the Nagarpalika Act, went into effect. It has given municipalities constitutional status and placed them within the justified section of the constitution.

Historical Background of Urban Bodies 

  • The origin of urban local bodies in India goes back to ancient empires such as the Mauryan and Gupta empires.
  • The Municipal Corporation Act of 1882 was enacted during the British Raj.
  • This Act established the framework for developing urban municipal governments in India. With independence, the Indian Constitution acknowledged the need for effective urban governance.
  • It permitted the formation of urban local bodies.
  • The Nagarpalika Act of 1992, or the 74th Amendment, offered increased autonomy to urban local bodies. It provided for the development of three-tier urban local government structures.

The Amendment also provided for the devolution of powers and responsibilities to urban local governments in areas such as urban planning, land use control, public health and sanitation, housing, transportation, and public works, among others. The Government of India has also developed many programmes to encourage the growth of urban local bodies in India. These include the JNNURMAMRUT, and the Smart Cities Mission.

Features of the 74th Constitutional Amendment Act – 1992

1. Constitution of Municipalities 

The Indian Constitution establishes a three-tiered structure of government: union, state, and municipalities. The 74th Constitutional Amendment Act of 1992 provided for the formation of municipalities. Depending on the urban area’s size, population, and revenue, the Act provides for the formation of urban local authorities. Examples of ULA’s are the Municipal Corporation, Municipal Council, Town Area Committee, and Nagar Panchayat.

  • State legislatures have the authority to enact legislation governing the formation and governance of municipalities in their respective states.
  • Municipalities have the authority to levy taxes, fees, and levies in order to provide services to their inhabitants.
  • Municipal bodies also have the authority to enact rules and ordinances to govern their area.

2. Composition of Municipalities

Municipalities’ composition might vary depending on the local authority in question. Most towns will have a governing body or council to decide on the Municipality’s day-to-day operations. This governing body may also be in charge of approving the annual budget, establishing local ordinances, granting licenses, and hiring municipal staff. Most municipalities will have a mayor or another elected figure who serves as the Municipality’s main executive.

  • Departments such as police, fire, sanitation, public works, parks and recreation, and others are components of municipalities. 
  • These departments are in charge of delivering municipal services and recreational activities. 
  • Some towns may have special districts or boards in charge of certain areas of the Municipality. Some examples of these areas are public utilities, airports, and school districts.

3. Constitution of Wards Committees

The Municipality forms the Wards Committee according to the State Municipal Act, comprising a minimum of 11 and a maximum of 21 members.

Reserved seats in the Wards Committees follow the same reservation pattern as the seats in the Municipality. This includes reservations for Scheduled Castes, Scheduled Tribes, and women.

5. Duration of Municipalities

The duration of a municipality is five years. This can be extended by the state government by a maximum of six months.

6. Powers and Functions of the Municipalities

  • The powers and functions of the municipalities are laid down in the respective State Municipal Acts.
  • Generally, the municipalities are responsible for providing civic services such as water supply, sanitation, health and hygiene, solid waste management, roads and bridges, street lighting, public transport, slum improvement, and public parks.
  • They are also responsible for tax collection, issuing licenses, and providing public amenities.

7.Finances of Municipalities

  • Municipalities are responsible for raising and managing their own finances.
  • This includes the collection of taxes and fees, the setting of budgets, and the approval of expenditures.
  • They also have the authority to borrow money and issue bonds.
  • Responsibility lies with municipalities to ensure the prudent utilization of their financial resources and adherence to legal norms for all expenditures.

8. Finance Commission

The 74th CAA introduces many of the major features related to the Finance Commission. These include:

  • Finance Commission for Municipalities: The Amendment provided for the establishment of a Finance Commission at the state level. It will review the financial position of municipalities. It will also make recommendations on matters such as taxes, grants, and allocation of resources.
  • Grants for Municipalities: The Amendment made it mandatory for states to provide grants-in-aid to municipalities. This grant is for the provision of basic services such as water supply, sanitation, and roads.
  • Devolution of Funds: The Amendment also made it mandatory for states to devolve funds to municipalities on a regular basis. This is to ensure their financial independence and autonomy.

9. Municipality Elections

Every five years, municipal elections take place to elect members of the municipal council. These officials are in charge of making decisions on behalf of the people in their Municipality. They also have the power to enact laws and establish policies that influence the local populace.

10. Accountancy and audit

Municipalities must preserve proper financial records. Local governments should receive these records for audit. This audit ensures the accurate management of the Municipality’s finances. If the local government suspects any anomalies, it may undertake its own audit.

11. Committee for District Planning

  • District Planning Committees are responsible for developing plans for district development.
  • Comprising representatives from the municipal council, the local government, and other stakeholders forms their composition.
  • They are responsible for assessing the needs of the district and formulating plans for its development.
  • They also have the authority to allocate funds for projects that would benefit the district.


If we have to closely evaluate the 74th Constitutional Amendment Act, then perhaps the act has significantly contributed to the development of the urban local bodies. Further, it has also succeeded in ensuring transparency for these bodies that have existed at the urban level. Empowering urban local bodies, indeed, involves enhancing their decision-making capabilities, securing financial autonomy, and undertaking revenue generation actions to meet the needs and demands of the people.

Salient Features Of 74th Amendment Act, Salient Features Of 74th Amendment Act, Salient Features Of 74th Amendment Act

Read Also: Compulsory And Voluntary Provisions Of The PRI Act

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