Seventy-fourth Amendment of the Constitution of India

The Seventy-fourth Amendment of the Constitution of India, officially known as The Constitution (Seventy-fourth Amendment) Act, 1992, was a landmark reform aimed at strengthening urban local governance through the constitutional recognition of Urban Local Bodies (ULBs). Enacted to deepen democratic decentralisation in urban areas, the amendment provided a framework for establishing municipal governments as the lowest tier of administration in towns and cities. It came into force on 1 June 1993, institutionalising self-governance in urban India through Part IXA (Articles 243P–243ZG) of the Constitution.

Background and Context

Before the enactment of this amendment, urban local bodies in India functioned primarily under state legislation, with no constitutional status. These bodies, including municipal corporations, municipal councils, and nagar panchayats, had limited autonomy and often depended heavily on state governments for finances and policy direction.
Rapid urbanisation during the late twentieth century exposed the limitations of this arrangement. Cities faced growing challenges related to infrastructure, public health, housing, sanitation, and transport, which required robust and accountable local governance. The Seventy-fourth Amendment was introduced as a parallel reform to the Seventy-third Amendment (1992), which had empowered rural local bodies (Panchayati Raj Institutions). Together, these two amendments established a constitutional framework for democratic decentralisation across rural and urban India.

Legislative History

The Constitution (Seventy-fourth Amendment) Bill, 1991, was introduced in Parliament by the government of Prime Minister P. V. Narasimha Rao, who sought to institutionalise urban self-governance. It proposed to create a uniform structure for municipalities and devolve powers and responsibilities related to urban development and welfare.
The Bill was passed by both Houses of Parliament in December 1992, received the assent of the President on 20 April 1993, and came into force on 1 June 1993. The amendment added Part IXA (Articles 243P to 243ZG) to the Constitution and inserted the Twelfth Schedule, which lists eighteen functions to be transferred to municipalities.

Key Provisions of the Amendment

1. Structure of Urban Local BodiesThe amendment classified urban local bodies into three categories based on population and urban characteristics:

• Nagar Panchayat – for areas in transition from rural to urban.
• Municipal Council (Municipality) – for smaller urban areas.
• Municipal Corporation – for larger urban areas.

This classification ensured that governance structures were appropriate to the size and needs of each settlement.
2. Composition and Tenure

• Members of all municipalities are directly elected by the people of the respective constituencies.
• Each municipality has a fixed term of five years.
• If dissolved prematurely, elections must be held within six months.

3. Reservation of Seats

• One-third of the total seats, including those reserved for Scheduled Castes (SCs) and Scheduled Tribes (STs), are reserved for women, promoting gender inclusivity in urban politics.
• State legislatures may also provide reservations for Other Backward Classes (OBCs).

4. Powers and ResponsibilitiesMunicipalities are entrusted with functions related to economic development and social justice, as outlined in the Twelfth Schedule. These include:

• Urban planning and regulation of land use,
• Water supply and sanitation,
• Solid waste management,
• Public health and urban forestry,
• Slum improvement and poverty alleviation,
• Urban transport, roads, and bridges,
• Promotion of cultural, educational, and aesthetic aspects of urban life.

States are required to endow municipalities with the necessary powers, authority, and financial resources to enable them to perform these functions effectively.
5. Ward Committees and Metropolitan Governance

• In cities with populations above three lakh, Ward Committees must be formed to promote citizen participation at the neighbourhood level.
• For metropolitan areas, Metropolitan Planning Committees (MPCs) are constituted to prepare coordinated development plans across jurisdictions.
• District Planning Committees (DPCs) are established to integrate plans prepared by panchayats and municipalities within a district.

6. State Election CommissionsThe amendment mandates the creation of a State Election Commission in each State to conduct and oversee elections to municipalities. This ensures autonomy, transparency, and regularity in local elections.
7. State Finance CommissionsEach State is required to establish a State Finance Commission every five years to review the financial position of municipalities and recommend measures regarding:

• Distribution of taxes and grants between the State and municipalities,
• Determination of revenue sources for local bodies,
• Improvement of financial sustainability.

8. Legislative Powers and TaxationState legislatures may authorise municipalities to levy, collect, and appropriate specific taxes, duties, tolls, and fees to support their functioning. Additionally, municipalities may receive grants-in-aid from the State Government.
9. Functional Devolution (Twelfth Schedule)The Twelfth Schedule, added by this amendment, lists eighteen functional areas that can be devolved to municipalities, including:

• Urban planning, roads, and bridges,
• Public health and sanitation,
• Slum improvement and housing,
• Urban forestry and environment protection,
• Water supply and street lighting,
• Fire services and urban amenities.

Institutional Innovations

The Seventy-fourth Amendment not only empowered local bodies but also introduced several institutional mechanisms to improve coordination and planning in urban governance:

• Ward Committees – For micro-level citizen participation.
• District Planning Committees (DPCs) – To consolidate plans of panchayats and municipalities at the district level.
• Metropolitan Planning Committees (MPCs) – For metropolitan areas with multiple jurisdictions, ensuring integrated regional planning.

Significance and Impact

The Seventy-fourth Amendment was a transformative reform in urban governance, giving legal recognition and stability to municipalities. Its major achievements include:

• Democratic Decentralisation: It institutionalised the idea that urban governance should be participatory, accountable, and close to the people.
• Empowerment of Local Bodies: Municipalities became constitutionally mandated authorities responsible for urban development.
• Gender and Social Inclusion: The reservation of seats for women and disadvantaged groups enhanced diversity in urban political leadership.
• Improved Planning and Coordination: The establishment of DPCs and MPCs strengthened integrated and sustainable urban planning.
• Accountability and Autonomy: State Election Commissions and Finance Commissions improved transparency in local administration and financial management.

Challenges and Limitations

Despite its progressive framework, the implementation of the Seventy-fourth Amendment has faced persistent challenges:

• Incomplete Devolution: Many states have been reluctant to transfer adequate powers, functions, and finances to ULBs.
• Financial Constraints: Urban local bodies often struggle with limited revenue generation and dependence on state funds.
• Administrative Inefficiency: Shortages of skilled manpower and overlapping jurisdictions hinder effective service delivery.
• Political Interference: State governments frequently influence municipal decisions, limiting local autonomy.

Nevertheless, the amendment remains the cornerstone of urban local self-government in India.

Contemporary Relevance

Today, urban local bodies govern India’s expanding cities and towns, which collectively accommodate nearly half of the nation’s population. With increasing urbanisation, municipalities play a pivotal role in addressing challenges of housing, infrastructure, environmental management, and sustainable development.
The Seventy-fourth Amendment has thus laid the constitutional foundation for urban democracy, ensuring that the principles of decentralisation, participation, and inclusiveness continue to guide India’s urban governance. By empowering city governments as instruments of self-rule, it embodies the spirit that power in a democracy rightfully belongs to the people.