The 74th Constitutional Amendment Act, 1992 gave constitutional status to Urban Local Bodies (ULBs) and marked a decisive step toward democratic decentralisation in urban governance. It inserted Part IXA (Articles 243P to 243ZG) and added the Twelfth Schedule to the Constitution, thereby institutionalising municipalities as the third tier of government.
The Act came into force on 1 June 1993.
Background and Rationale
Before 1992, municipalities functioned under state laws without uniformity or constitutional protection. Elections were irregular, financial autonomy was weak, and state governments frequently superseded local bodies.
Rapid urbanisation and governance challenges necessitated:
- Democratic accountability
- Regular elections
- Financial empowerment
- Clear functional devolution
The 74th Amendment addressed these structural weaknesses.
Key Constitutional Provisions
1. Constitutional Recognition
The Amendment introduced Part IXA, titled “The Municipalities”, ensuring constitutional backing for urban local governance.
2. Types of Municipalities (Article 243Q)
Urban areas are classified into:
- Nagar Panchayat – Transitional areas (rural to urban)
- Municipal Council – Smaller urban areas
- Municipal Corporation – Larger urban areas
The classification is determined by state legislatures based on population, density, and economic activity.
3. Composition and Elections (Articles 243R & 243U)
- Members are directly elected from territorial wards.
- The duration of municipalities is five years.
- Elections must be conducted before expiry or within six months of dissolution.
- State Election Commissions supervise municipal elections.
4. Reservation of Seats (Article 243T)
- Reservation for Scheduled Castes and Scheduled Tribes proportional to population.
- At least one-third of total seats reserved for women, including SC/ST women.
- Provision for reservation of offices of Chairpersons.
5. Powers and Responsibilities (Article 243W)
State legislatures may devolve powers to municipalities regarding:
- Preparation of plans for economic development and social justice
- Implementation of schemes in relation to subjects listed in the Twelfth Schedule
6. Twelfth Schedule (18 Subjects)
The Twelfth Schedule outlines core municipal functions, including:
- Urban planning
- Regulation of land use
- Roads and bridges
- Water supply
- Public health and sanitation
- Solid waste management
- Fire services
- Urban forestry
- Slum improvement
- Urban poverty alleviation
7. Metropolitan and District Planning Committees
- District Planning Committee (Article 243ZD) integrates rural and urban plans.
- Metropolitan Planning Committee (Article 243ZE) prepares development plans for metropolitan areas.
8. Financial Provisions (Article 243Y)
- Establishment of a State Finance Commission (SFC) every five years to review financial position of municipalities.
- Recommendations on distribution of state revenues to local bodies.
Significance of the Amendment
- Strengthened urban decentralisation.
- Institutionalised grassroots democracy in cities.
- Promoted inclusive representation, especially for women and marginalised groups.
- Enhanced accountability through regular elections.
- Recognised urban governance as integral to federal structure.
Limitations and Challenges
- Devolution of the “3Fs” (Functions, Finances, Functionaries) remains incomplete in many states.
- Heavy dependence on state governments for financial resources.
- Weak State Finance Commissions in practice.
- Parallel urban development authorities dilute municipal powers.
Conclusion
The 74th Constitutional Amendment Act, 1992, was a landmark reform in India’s democratic evolution. It provided constitutional legitimacy to urban local governance and aimed to make municipalities effective instruments of participatory development.
However, its full potential depends on genuine fiscal and administrative decentralisation by state governments and strengthening of urban institutional capacity.
