Municipalities: The 74th Amendment's Three Urban Bodies and the Twelfth Schedule

Part IX-A of the Constitution, Articles 243P to 243ZG, gave urban local government the same constitutional footing the 73rd Amendment had given rural Panchayati Raj a year earlier. The 74th Amendment Act, 1992, inserted this Part with effect from 1 June 1993, and the two Parts are designed as a matched pair: read this chapter alongside Panchayati Raj rather than as an unrelated one, since most of the mechanisms (reservation, a state Finance Commission, a state Election Commission) run in parallel for both.

Three types of urban body (Article 243Q)

Article 243Q requires every state to constitute exactly one of three kinds of Municipality in every urban area, graded by size: a Nagar Panchayat for a transitional area (moving from rural to urban), a Municipal Council for a smaller urban area, and a Municipal Corporation for a larger urban area. The Governor decides which category an area falls into, based on population, population density, local revenue, the share of non-agricultural employment, and other factors the Governor considers relevant. One express carve-out: the Governor can notify part of an urban area as an industrial township and exempt it from having its own Municipality at all, where an industrial establishment there is already providing municipal-type services.

Composition and direct election (Article 243R)

As with Panchayats, all Municipality seats are filled by direct election from territorial constituencies called wards, with the state legislature free to add provisions for representing the Chairpersons of certain committees, MPs and MLAs whose constituencies lie within the Municipal area, and similar categories, without letting them outnumber the directly elected members.

Wards Committees: mandatory only above a population threshold (Article 243S)

A specific numeric threshold worth knowing precisely: Wards Committees are constitutionally mandatory only for a Municipality with a population of three lakhs or more; below that, a state may still choose to constitute them, but the Constitution does not require it. Where a Wards Committee covers a single ward, that ward's own Municipality member chairs it; where it covers multiple wards, the Committee's own members elect one of themselves as Chairperson.

Functions: the Twelfth Schedule (Article 243W)

Article 243W lets a state legislature devolve powers to Municipalities, including the matters listed in the Twelfth Schedule (inserted by the same 74th Amendment), the urban-government counterpart to Panchayati Raj's Eleventh Schedule. The Twelfth Schedule's 18 matters include urban planning, regulation of land use, roads and bridges, water supply, public health and sanitation, fire services, urban forestry, slum improvement, and urban poverty alleviation, among others. As with the Eleventh Schedule, listing a matter does not itself transfer it: actual devolution still depends on the state's own legislature acting, which is why the real distribution of urban functions varies considerably between states even though every state operates under the identical constitutional text.

Finances (Article 243X)

A state legislature may authorise a Municipality to levy and collect its own taxes, duties, tolls and fees; assign to it taxes the state government itself collects; provide grants-in-aid from the state's Consolidated Fund; and set up dedicated Municipal Funds for money received by or on behalf of the Municipality. As with Panchayati Raj's finances, a State Finance Commission (Article 243Y, sharing the same Commission constituted under Article 243-I for Panchayats) reviews and recommends the actual division of resources between the state and its Municipalities.

Quick revision points

• 74th Amendment Act, 1992, in force 1 June 1993; Part IX-A, Articles 243P to 243ZG.
• Three bodies by size: Nagar Panchayat (transitional), Municipal Council (smaller urban), Municipal Corporation (larger urban).
• Wards Committees mandatory only for a Municipality with population 3 lakh or more (Article 243S).
• Functions run through the Twelfth Schedule (18 matters), devolved only as far as the state legislature actually chooses to devolve them.
• Same State Finance Commission (Article 243-I) serves both Panchayats and Municipalities; Article 243Y applies its recommendations to urban bodies.

Treat this chapter as "Panchayati Raj's urban twin" rather than learning it from scratch: the mechanisms are almost identical, and the numbers that differ (the 3-lakh Wards Committee threshold, the Twelfth Schedule instead of the Eleventh) are exactly what a question is likely to test you on mixing up.