74th Constitutional Amendment Act 1992, Provisions, Criticism

The 74th Constitutional Amendment Act, 1992, was introduced to strengthen urban local self-government and address the weak and irregular functioning of municipalities. It gave constitutional status to Urban Local Bodies (ULBs) by inserting Part IX-A (Articles 243P–243ZG) and the Twelfth Schedule, providing a framework for municipal structure, elections, reservations, tenure and planning.

The Amendment strengthened democratic decentralisation and citizen participation in urban governance through elected municipalities, reservations and institutional mechanisms. However, challenges such as inadequate devolution of functions and finances continue to constrain effective urban self-government.

74th Constitutional Amendment Act Background

The 74th Constitutional Amendment Act, 1992, was the culmination of efforts to strengthen urban local self-government in India. It sought to address the weak institutional, financial, and electoral position of municipalities by giving them a constitutional framework.

• Pre-1992: Urban local bodies functioned mainly under State municipal laws, resulting in considerable variation in their structure, powers, and functioning.
• Constitutional Position (1950): Local government was placed in the State List, leaving municipalities largely dependent on State Legislatures for their organisation and powers.
• Need for Reform: Irregular elections, prolonged supersession, inadequate powers, and weak finances affected the functioning of many urban local bodies. These concerns created the need for constitutional protection.
• 74th Amendment Bill (1992): The Bill was introduced to provide a common constitutional framework for municipalities, including regular elections, reservations, financial arrangements, and greater functional responsibilities.
• Parliamentary Approval: The Bill was passed by the Lok Sabha on 22 December 1992 and the Rajya Sabha on 23 December 1992.
• Enactment: The Amendment received Presidential assent on 20 April 1993 and came into force on 1 June 1993.

74th Constitutional Amendment Act Objectives

The 74th Constitutional Amendment Act aimed to strengthen Urban Local Bodies (ULBs) by giving them a constitutional framework, and its objectives are clearly stated in the Statement of Objects and Reasons of the official Amendment Act.

• Strengthening Urban Self-Government: Make Urban Local Bodies more effective as vibrant democratic units of self-government.
• Stable Centre-State–ULB Relationship: Provide a clearer framework for the relationship between State Governments and Urban Local Bodies, particularly regarding functions and taxation powers.
• Regular Elections: Ensure regular and timely municipal elections, including elections within six months after dissolution.
• Inclusive Representation: Ensure adequate representation of SCs, STs and women in Municipalities through reservation.
• Functional Devolution: Enable Municipalities to undertake economic development and social justice planning and implement development schemes.
• Financial Empowerment: Provide a framework for municipal taxation, revenue sharing and grants-in-aid, supported by the State Finance Commission.
• Urban Planning: Establish mechanisms such as District Planning Committees and Metropolitan Planning Committees for integrated development planning.

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74th Constitutional Amendment Act Features

The 74th Amendment created a structured framework for urban local governance, covering the composition, representation, tenure, electoral machinery, finances, and planning functions of Municipalities.

Part IX-A

The 74th Constitutional Amendment Act, 1992 inserted Part IX-A (Articles 243P–243ZG) to provide a constitutional framework for Municipalities and urban local governance.

• Nagarpalika Act: The Amendment is also known as the Nagarpalika Act and came into force on 1 June 1993.
• Constitutional Status: It gave Municipalities a constitutional status, providing uniform provisions for their composition, elections, tenure, reservation, powers and finances.
• Urban Local Governance: It established a common constitutional framework for decentralised governance in urban areas, while allowing States to determine the detailed institutional arrangements.

Three Types of Municipalities

Article 243Q provides for the establishment of 3 kinds of municipalities in every state.

• Nagar Panchayat: Established for an area transitioning from rural to urban.
• Municipal Council: Established for a smaller urban area.
• Municipal Corporation: Established for a larger urban area.
• The Governor determines the nature of an area by considering factors such as population, population density, revenue generated, percentage of employment in non-agricultural activities, and other relevant factors.
• The Governor may also specify an industrial township by public notification where an industrial establishment provides or proposes to provide municipal services.

Reservation of Seats

Every municipality corporation must reserve seats for Scheduled castes and Scheduled tribes in proportion to their population relative to the entire municipal area.

• Direct elections: SC/ST reservation applies to seats filled through direct elections, not nominated seats.
• Women: At least one-third of the total directly elected seats are reserved for women, including seats reserved for SC/ST women.
• Backward Classes: State Legislatures may provide reservation for backward classes of citizens.
• Reservation can also be provided for the office of Chairperson under State law.

Duration of Municipalities

Article 243U explains that the normal tenure of a Municipality is five years from the date appointed for its first meeting.

• Elections to constitute a new Municipality should be completed before the expiry of the existing term.
• If a Municipality is dissolved before five years, elections should generally be completed within six months of dissolution.
• This ensures continuity of elected urban local government.

Disqualification of Members

A person may be disqualified for membership of a Municipality if disqualified under a law applicable to election as a State Legislative Assembly member.

• The minimum age for becoming a member of a Municipality is 21 years.
• Thus, the constitutional framework provides eligibility and disqualification safeguards for municipal representatives.

Municipal Financial Powers

Article 243X of the Constitution grants a state's legislature the power to pass tax-related legislation. Such laws may specify:

• Taxes, duties, fees, and other charges that municipalities may impose and collect in accordance with the process outlined in state law
• The State Government would levy and collect taxes, duties, fees, etc., with a portion going to the Municipalities.
• A grant-in-aid that the state would provide to the municipalities
• Establishment of funds for the Municipality to credit and withdraw funds.

State Finance Commission

Article 243Y provides that the Finance Commission constituted for Panchayats under Part IX also reviews the financial position of Municipalities.

• It recommends the distribution of State revenues between the State Government and Municipalities.
• It may recommend allocation among Municipalities, taxes to be assigned to them, and grants-in-aid.
• It also recommends measures to improve the financial position of Municipalities.

Audit and Accounts

Under Article 243Z, maintenance of municipal accounts and their audit are governed by State law.

• State Legislatures can prescribe appropriate arrangements according to local requirements and the institutional framework.
• This provides a mechanism for financial accountability and transparency of Municipalities.

State Election Commission

Article 243ZA provides that the State Election Commission has the superintendence, direction and control over municipal elections.

• This includes preparation of electoral rolls and conduct of elections.
• It provides a constitutional mechanism for holding regular and independent local-body elections.

Application to Union Territories

The President may, by public notification, make modifications or exceptions while applying these provisions to a Union Territory. 

• This allows the constitutional framework to accommodate the administrative circumstances of different UTs.
• Article 243ZB: The provisions relating to Municipalities also apply to Union Territories.

Non-Applicability in Certain Areas

It also excludes areas covered by the Darjeeling Gorkha Hill Council as specified in the constitutional framework.

• Article 243ZC: Part IX-A does not automatically apply to certain Scheduled and tribal areas.
• Parliament may extend or modify the application of these provisions to such areas through legislation.

District Planning Committee

It consolidates plans prepared by Panchayats and Municipalities and prepares a draft development plan for the district as a whole.

• Article 243ZD: A District Planning Committee (DPC) is constituted at the district level.
• While preparing the plan, it considers spatial planning, sharing of water and natural resources, integrated infrastructure development, environmental conservation and available resources.
• The composition and manner of filling seats are left to the State Legislature.
• The draft plan is forwarded by the Chairperson to the State Government.

Metropolitan Planning Committee

It prepares a draft development plan for the metropolitan area as a whole. It considers plans prepared by Municipalities and Panchayats, coordinated spatial planning and sharing of water and other resources.

• Article 243ZE: A Metropolitan Planning Committee (MPC) is constituted for every metropolitan area.
• It also considers integrated infrastructure development, environmental conservation and the priorities of the Union and State Governments.
• The Committee also takes into account the likely investments by government agencies and other available resources.

Municipal Composition

The 74th Constitutional Amendment provides a broad constitutional framework for the composition of municipalities, while allowing State Legislatures to determine detailed arrangements according to local conditions.

• Elected Representatives: Municipalities consist primarily of members directly elected by the people from territorial constituencies called wards.
• Nominated Members: State Legislatures may provide representation to persons with special knowledge or experience in municipal administration, but such nominated members do not have voting rights in municipal meetings.
• Representation of Parliament and State Legislature: State laws may provide representation for Members of the Lok Sabha, Legislative Assembly, Rajya Sabha and Legislative Council whose constituencies cover the municipal area.
• Ward Committees: Municipalities with a population of 3 lakh or more must constitute Ward Committees, supporting decentralised participation at the neighbourhood level.

74th Constitutional Amendment Act 12th Schedule

The Twelfth Schedule, added through the 74th Constitutional Amendment Act, identifies 18 functions that may be entrusted to municipalities, providing a constitutional framework for urban governance and service delivery.

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, cremation grounds, and electric crematoriums.
15. Cattle pounds; 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 slaughterhouses and tanneries.

74th Constitutional Amendment Act Importance

The 74th Constitutional Amendment Act, 1992 strengthened municipalities and provided a constitutional framework for urban self-governance.

• Constitutional Recognition: Municipalities received constitutional status under Part IX-A, ensuring regular elections and continuity of urban local governance.
• Women’s Empowerment: Reservation of at least one-third of seats and chairperson positions for women created greater opportunities for women to exercise political leadership in urban governance.
• Citizen Participation: Ward Committees provided an institutional mechanism for citizens to participate in neighbourhood-level governance and local issues.
• Urban Service Delivery: The Twelfth Schedule identified 18 areas, including urban planning, sanitation, water supply and slum improvement, providing a framework for municipal responsibilities.
• Financial Autonomy: Provisions relating to municipal taxation, grants and State Finance Commissions sought to strengthen the financial position of Urban Local Bodies.
• Coordinated Planning: District Planning Committees and Metropolitan Planning Committees promoted coordination in planning across rural, urban and metropolitan areas.

74th Constitutional Amendment Act Challenges

Although the 74th Constitutional Amendment Act provided a constitutional foundation for urban local governance, the actual empowerment of municipalities continues to depend significantly on State-level devolution and institutional capacity.

• Incomplete Devolution: The transfer of functions, funds, and functionaries to Urban Local Bodies remains uneven, limiting their ability to perform the responsibilities envisaged under Article 243W.
• Financial Weakness: Many municipalities have limited own-source revenues and remain dependent on State and Central transfers, affecting their financial autonomy.
• State Control: Municipalities continue to depend heavily on State Governments for decisions relating to powers, functions, staffing and finances, reducing the depth of urban decentralisation.
• Weak Urban Planning: Fragmented responsibilities among Municipalities, development authorities and other agencies can lead to poor coordination in land use, infrastructure and service delivery.
• Accountability Concerns: Limited transparency, weak local-level monitoring and inadequate capacity for financial management can affect municipal accountability and service delivery.