Municipalities

• The term "Urban Local Government" signifies governance of an urban area by elected representatives.
• Jurisdiction is limited to a specific urban area demarcated by the state government.
• There are eight types of urban local governments in India:
  • Municipal corporation
  • Municipality
  • Notified area committee
  • Town area committee
  • Cantonment board
  • Township
  • Port trust
  • Special purpose agency.
• The system was constitutionalized through the 74th Constitutional Amendment Act of 1992.
• At the central level, the subject is dealt with by:
  • Ministry of Housing and Urban Affairs
  • Ministry of Defence (for cantonment boards)
  • Ministry of Home Affairs (for Union Territories)

Evolution of Urban Bodies (Historical Perspective)

• Institutions originated and developed during British rule.
  • 1688: First municipal corporation set up in Madras. (Charter issued Dec 30, 1687, came into existence Sept 29, 1688).
  • 1726: Municipal corporations set up in Bombay and Calcutta.
  • 1870: Lord Mayo's Resolution on financial decentralization visualized development of local self-government.
  • 1882: Lord Ripon's Resolution hailed as the 'Magna Carta' of local self-government. Ripon is called the father of local self-government in India.
  • 1907: Royal Commission on decentralization appointed; submitted report in 1909 (Chairman: C.E.H. Hobhouse).
  • 1919: Under dyarchy (Government of India Act), local self-government became a transferred subject.
  • 1924: Cantonments Act passed.
  • 1935: Under provincial autonomy (Government of India Act), local self-government declared a provincial subject.

Committees and Commissions

• Various committees and commissions appointed by the Central Government to improve the functioning of Urban Local Governments.

Sl. No.	Year	Name of the Committee / Commission	Chairman
1.	1949-51	Local Finance Enquiry Committee	P.K. Wattal
2.	1953-54	Taxation Enquiry Commission	John Matthai
3.	1963-65	Committee on the Training of Municipal Employees	Nur-Ud-din Ahmed
4.	1963-66	Rural-Urban Relationship Committee	A.P. Jain
5.	1963	Committee of Ministers on Augmentation of Financial Resources of Urban Local Bodies	Rafiq Zakaria
6.	1965-68	Committee on Service Conditions of Municipal Employees	B.S. Murthy
7.	1974	Committee on Budgetary Reform in Municipal Administration	Girijapati Mukharji
8.	1982	Study Group on Constitution, Powers and Laws of Urban Local Bodies and Municipal Corporations	K.N. Sahaya
9.	1985-88	National Commission on Urbanisation	C.M. Correa

Constitutionalisation

• Rajiv Gandhi Government: Introduced the 65th Constitutional Amendment Bill (Nagarpalika Bill) in 1989 to strengthen municipal bodies by conferring constitutional status, but it lapsed.
• V.P. Singh Government: Revised Nagarpalika Bill introduced in 1990, but also lapsed.
• Narasimha Rao Government: Modified Municipalities Bill introduced in 1991, finally emerged as the 74th Constitutional Amendment Act of 1992, effective June 1, 1993.

74th Amendment Act of 1992

• Added Part IX-A to the Constitution ("The Municipalities," Articles 243-P to 243-ZG).
• Added Twelfth Schedule (18 functional items of municipalities dealing with Article 243-W).
• Gave constitutional status to municipalities, making state governments constitutionally obligated to adopt the new system.

Salient Features of the Act

• Aims to revitalize and strengthen urban governments as units of local government.

• Three Types of Municipalities:

  • Nagar Panchayat (for a transitional area).
  • Municipal Council (for a smaller urban area).
  • Municipal Corporation (for a larger urban area).

• Exception: Governor may specify an area with industrial services as an industrial township, in which case a municipality may not be constituted.

• Governor considers factors like population, density, revenue, non-agricultural employment, and economic importance when specifying transitional, smaller, or larger urban areas.

• Composition:

  • Members directly elected from territorial constituencies (wards).
  • State legislature determines the manner of election of the chairperson.
  • State legislature may provide for representation of:
    • Persons with special knowledge/experience in municipal administration (without voting rights).
    • Members of Lok Sabha and state legislative assembly representing the area.
    • Members of Rajya Sabha and state legislative council registered as electors.
    • Chairpersons of committees.

• Wards Committees:

  • Constituted in municipalities with a population of 3 lakh or more.
  • State legislature determines composition and territorial area.

• Other Committees: State legislature can make provisions for other committees.

• Reservation of Seats:

  • For Scheduled Castes and Scheduled Tribes in proportion to their population.
  • Not less than one-third of seats reserved for women.
  • State legislature may provide for reservation of chairperson offices for SCs, STs, and women.
  • State legislature may also provide for reservation of seats or offices for backward classes.
  • Reservation for SCs/STs shall cease to have effect after the expiration of the period specified in Article 334 (presently eighty years, till 2030).

• Duration of Municipalities:

  • Five-year term from the date of first meeting.
  • Can be dissolved before term completion.
  • Fresh elections must be completed before the expiry of its duration.
  • Fresh elections must be completed within six months of dissolution.
  • If the remainder of the period is less than six months, no election is necessary.
  • Municipality reconstituted after premature dissolution continues only for the remainder of the dissolved municipality's term.
  • A municipality must be given a reasonable opportunity of being heard before its dissolution.
  • No amendment of any law shall cause dissolution of a municipality before the expiry of its five-year term.

• Disqualifications:

  • A person is disqualified if disqualified under any law for elections to the state legislature.
  • A person is disqualified if disqualified under any law made by the state legislature.
  • Minimum age is 21 years.
  • Questions of disqualification are referred to an authority determined by the state legislature.

• State Election Commission:

  • Superintendence, direction, and control of elections vested in the state election commission.
  • State legislature may make provisions for all matters relating to elections.

• Powers and Functions:

  • State legislature may endow municipalities with powers and authority to function as institutions of self-government.
  • This may include provisions for:
    • Preparation of plans for economic development and social justice.
    • Implementation of schemes for economic development and social justice including the eighteen matters listed in the Twelfth Schedule.

• Finances:

  • State legislature may:
    • Authorize a municipality to levy, collect, and appropriate taxes, duties, tolls, and fees.
    • Assign taxes, duties, tolls, and fees levied and collected by the state government.
    • Provide for grants-in-aid.
    • Provide for the constitution of funds.

• Finance Commission:

  • Reviews the financial position of municipalities every five years and makes recommendations to the governor regarding:
    • Principles governing the distribution of taxes, duties, tolls, and fees between the state and municipalities.
    • Determination of taxes, duties, tolls, and fees that may be assigned to municipalities.
    • Grants-in-aid to the municipalities.
  • Central Finance Commission suggests measures to augment the consolidated fund of a state to supplement the resources of the municipalities.

• Audit of Accounts:

  • State legislature makes provisions for the maintenance and auditing of accounts.

• Application to Union Territories:

  • Provisions apply to Union Territories, subject to exceptions and modifications specified by the President.
  • The President (in 2001) directed that provisions of Article 243ZD (Committee for district planning) and 243ZE (Committee for metropolitan planning) shall not apply to the National Capital Territory of Delhi.

• Exempted Areas:

  • Act does not apply to scheduled and tribal areas.
  • Act does not affect the functions and powers of the Darjeeling Gorkha Hill Council of West Bengal.
  • Parliament may extend provisions to scheduled and tribal areas with exceptions and modifications.

• District Planning Committee:

  • Every state constitutes a district planning committee to consolidate plans prepared by panchayats and municipalities and prepare a draft development plan for the district.
  • State legislature makes provisions regarding composition, election of members, functions, and election of chairpersons.
  • Four-fifths of the members should be elected by the elected members of the district panchayat and municipalities.
  • Representation should be proportional to the ratio between rural and urban populations.
  • Must consider matters of common interest between panchayats and municipalities, including spatial planning, sharing of resources, infrastructure development, and environmental conservation.
  • Must consider available resources.
  • Committee must consult with institutions and organizations as specified by the Governor.
  • Chairperson forwards the development plan to the state government.

• Metropolitan Planning Committee:

  • Every metropolitan area must have a metropolitan planning committee to prepare a draft development plan.
  • State legislature makes provisions regarding composition, election of members, representation, functions, and election of chairpersons.
  • Two-thirds of members should be elected by elected members of municipalities and chairpersons of panchayats.
  • Representation should be proportional to the population ratio.
  • Must consider plans prepared by the municipalities and panchayats, matters of common interest, overall objectives, priorities, and investments.
  • The committee must consult institutions and organizations as the Governor may specify.
  • Chairperson forwards the development plan to the state government.

• Continuance of Existing Laws and Municipalities:

  • State laws relating to municipalities continue for one year from the commencement of the act (June 1, 1993).
  • States must adopt the new system within this period.
  • Existing municipalities continue until their term expires unless dissolved sooner.

• Bar to Interference by Courts in Electoral Matters:

  • Courts cannot interfere in electoral matters.
  • The validity of any law relating to delimitation of constituencies or allotment of seats cannot be questioned in any court.
  • No election to any municipality can be questioned except by an election petition.

• Twelfth Schedule: Contains 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 sections 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 and 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.

Types of Urban Governments

• Eight types of urban local bodies in India:
  • Municipal Corporation
  • Municipality
  • Notified Area Committee
  • Town Area Committee
  • Cantonment Board
  • Township
  • Port Trust
  • Special Purpose Agency

1. Municipal Corporation

• Created for administration of big cities.
• Established by acts of state legislatures or Parliament.
• May have a common act or separate act for each corporation.
• Three authorities:
  • Council (deliberative and legislative wing).
    • Consists of directly elected councillors and a few nominated persons.
    • Headed by a Mayor (ornamental figure). Assisted by a Deputy Mayor.
  • Standing Committees.
    • Facilitate council working, dealing with public works, education, health, taxation, finance, etc.
  • Municipal Commissioner.
    • Responsible for implementing decisions.
    • Chief executive authority, appointed by the state government.

2. Municipality

• Established for administration of towns and smaller cities.
• Set up by acts of state legislatures or Parliament.
• Also known as municipal council, municipal committee, etc.
• Three authorities, similar to a municipal corporation.

3. Notified Area Committee

• Created for fast-developing towns or towns not fulfilling municipality conditions but considered important.
• Established by notification in the government gazette.
• Functions within the State Municipal Act.
• Powers almost equivalent to a municipality.
• Entirely a nominated body.

4. Town Area Committee

• Set up for administration of a small town.
• Semi-municipal authority with limited civic functions.
• Created by a separate act of state legislature.
• May be wholly elected, wholly nominated, or partly elected/nominated.

5. Cantonment Board

• Established for municipal administration for civilian population in a cantonment area.
• Set up under the Cantonments Act (Central government legislation).
• Works under the administrative control of the defence ministry.
• Cantonments Act of 2006 was enacted for democratization and improvement.
• 62 cantonment boards grouped into four categories based on civil population.

Category	Civil Population
I	Above 50,000
II	10,000 to 50,000
III	2,500 to 10,000
IV	Below 2,500

• Consists of partly elected and partly nominated members.

• Military officer commanding the station is the ex-officio president.

• The executive officer is appointed by the President of India.

• Category I board consists of:

  • A military officer commanding the station
  • An executive engineer in the cantonment
  • A health officer in the cantonment
  • A first class magistrate nominated by the district magistrate
  • Three military officers nominated by the officer commanding the station
  • Eight members elected by the people of the cantonment area
  • Chief Executive Officer of the cantonment board

6. Township

• Established by large public enterprises to provide civic amenities to their staff.
• Enterprise appoints a town administrator.
• No elected members.

7. Port Trust

• Established in port areas to manage/protect ports and provide civic amenities.
• Created by an Act of Parliament.
• Consists of both elected and nominated members.
• Chairman is an official.

8. Special Purpose Agency

• Set up by states to undertake designated activities or specific functions of urban local governments.
• Function-based, not area-based.
• Known as 'single purpose' or 'functional local bodies'.
• Examples: town improvement trusts, urban development authorities, water supply boards, housing boards, pollution control boards, electricity supply boards and city transport boards.
• Established as statutory bodies or departments by executive resolution.
• Function independently of local urban governments.

Municipal Personnel

• Three types of personnel systems in India:
  • Separate Personnel System: Each local body appoints, administers, and controls its own personnel.
  • Unified Personnel System: The state government appoints, administers, and controls municipal personnel.
  • Integrated Personnel System: Personnel of state government and local bodies form part of the same service.
• National Level Institutions Providing Training:
  • All-India Institute of Local Self-Government (Mumbai)
  • Centre for Urban and Environmental Studies (New Delhi)
  • Regional Centres for Urban and Environmental Studies (Kolkata, Lucknow, Hyderabad and Mumbai)
  • National Institute of Urban Affairs (New Delhi)
  • Human Settlement Management Institute (New Delhi)

Municipal Revenue

• Five sources of income for urban local bodies:
  • Tax Revenue: Property tax, entertainment tax, advertisement tax, professional tax, water tax, etc.
  • Non-Tax Revenue: Rent on municipal properties, fees and fines, royalty, interest, user charges, etc.
  • Grants: From Central and State Governments.
  • Devolution: Transfer of funds from the state government based on the state finance commission's recommendations.
  • Loans: From state government and financial institutions.

Central Council of Local Government

• Set up in 1954 under Article 263 of the Constitution.
• Originally known as Central Council of Local Self-Government.
• Deals with urban local government matters only (after 1958).
• Advisory body.
• Consists of the Minister for Housing and Urban Affairs and ministers for local self-government in states.
• Functions:
  • Considering and recommending policy matters.
  • Making proposals for legislation.
  • Examining the possibility of cooperation between the Centre and the states.
  • Drawing up a common programme of action.
  • Recommending Central financial assistance.
  • Reviewing the work done by the local bodies with the Central financial assistance.

Articles Related to Municipalities at a Glance

Article No.	Subject-matter
243P	Definitions
243Q	Constitution of municipalities
243R	Composition of municipalities
243S	Constitution and composition of wards committees, and so on
243T	Reservation of seats
243U	Duration of municipalities, and so on
243V	Disqualifications for membership
243W	Powers, authority and responsibilities of municipalities, and so on
243X	Powers to impose taxes by, and funds of, the municipalities
243Y	Finance commission
243Z	Audit of accounts of municipalities
243ZA	Elections to the municipalities
243ZB	Application to union territories
243ZC	Part not to apply to certain areas
243ZD	Committee for district planning
243ZE	Committee for metropolitan planning
243ZF	Continuance of existing laws and municipalities
243ZG	Bar to interference by courts in electoral matters