74th Amendment Act of the Indian Constitution

The 74th Constitutional Amendment Act, 1992 added a new Part IX-A to the Constitution, titled “The Municipalities”, and inserted Articles 243P to 243Z

74th Amendment Act of the Indian Constitution

If the 73rd Amendment of the Indian Constitution gave power to the villages through Panchayati Raj, then the 74th Amendment Act of 1992 did something equally revolutionary — it gave power to the cities and towns of India.

Before this amendment, urban areas were governed mostly by state governments. The local bodies, like municipalities, existed but had little power, less money, and almost no independence. Most urban issues — from water supply to garbage management — were handled by bureaucrats sitting in state capitals.

But India was changing fast. Cities were growing, people were migrating, and urban problems were becoming complex. It was clear that to make democracy meaningful, the urban population also needed its own local government — a system that could plan, execute, and manage things directly.

That’s where the 74th Amendment Act, 1992 came in. Passed along with the 73rd Amendment, it gave constitutional status to urban local bodies, making them a permanent and integral part of Indian democracy. It was a big step toward realizing the dream of “power to the people” — not just in villages, but in every street and neighborhood of the country.

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The Background — The Need for Urban Local Government

In the decades after independence, India witnessed rapid urbanization. Cities like Delhi, Mumbai, Kolkata, and Chennai grew rapidly, but smaller towns and municipalities were neglected. The existing local bodies were weak, irregularly elected, and heavily dependent on state governments for funds and decision-making.

Urban problems such as housing shortages, poor sanitation, lack of public transport, and inadequate infrastructure were piling up. There was hardly any coordination between different agencies.

The government realized that urban areas couldn’t be managed from far away. People living in cities needed a say in how their communities were governed — just like villagers did through Panchayats.

Several committees studied this issue before the 74th Amendment was introduced.

The Balwantrai Mehta Committee (1957)

Though it focused mainly on rural local government, it emphasized decentralization — transferring power from the state to local levels.

The Ashok Mehta Committee (1978)

This committee emphasized the need to strengthen local governance at both rural and urban levels.

The L. M. Singhvi Committee (1986)

This was the first to recommend constitutional status for local self-government.

The recommendations eventually took shape when Prime Minister P. V. Narasimha Rao’s government introduced the 74th Amendment Bill in Parliament. It was passed in December 1992 and came into force on 1 June 1993.

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The Main Objective of the 74th Amendment

The primary goal of the 74th Amendment was to strengthen urban local governance and make it a third tier of democracy, alongside the Union and State governments.

It aimed to:

• Create a uniform structure for urban local bodies across India.

• Empower local bodies to function as self-governing institutions.

• Ensure regular elections and representation for weaker sections and women.

• Give these bodies control over local planning and resources.

• Bring transparency, accountability, and participation in urban governance.

In short, it was designed to make cities and towns more democratic, responsive, and efficient.

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Constitutional Changes Made by the 74th Amendment

The 74th Constitutional Amendment Act, 1992 added a new Part IX-A to the Constitution, titled “The Municipalities”, and inserted Articles 243P to 243ZG.

It also added the Twelfth Schedule, which lists 18 subjects that fall under the responsibility of municipalities.

These changes gave constitutional recognition to local urban governance — meaning municipalities now had a legal right to exist, hold elections, and function with autonomy.

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Types of Urban Local Bodies

The 74th Amendment recognized three types of municipalities, depending on the size and importance of the urban area.

1. Nagar Panchayat (for transitional areas)

A Nagar Panchayat is for an area that is in transition from a rural to an urban character. These are usually small towns that are growing but not yet fully urbanized.

2. Municipal Council (for smaller urban areas)

A Municipal Council governs a smaller urban area — like a medium-sized town or city.

3. Municipal Corporation (for larger urban areas)

A Municipal Corporation (Mahanagar Palika) is for big cities like Mumbai, Delhi, or Chennai. These corporations handle large populations and complex urban challenges.

This three-tier classification ensures that each type of urban area gets a local government suitable to its size and needs.

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Composition of Municipalities

Each municipality is made up of elected representatives from different wards (local areas). The key features are:

• Members are directly elected by the people through regular elections.

• The state can also nominate a few members with special knowledge or experience in urban matters.

• The Chairperson (Mayor or President) is either directly elected by the people or indirectly elected by the members of the municipality — depending on state laws.

The structure is designed to make sure that urban governance remains democratic and accountable.

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Wards Committees

In cities with a population of three lakh or more, the 74th Amendment mandates the creation of Wards Committees.

These committees represent smaller areas within the city and ensure that local problems are addressed effectively. They include members from each ward and sometimes citizens or resident welfare representatives.

This concept brings governance closer to the people — decisions about your street, park, or neighborhood are made by representatives from your area.

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Reservation of Seats

The 74th Amendment made urban local governance more inclusive by introducing reservations for weaker sections and women.

• Seats are reserved for Scheduled Castes (SCs) and Scheduled Tribes (STs) in proportion to their population in the municipal area.

• One-third (33%) of all seats are reserved for women, including those belonging to SC/ST categories.

• Some states have gone further and increased women’s reservation to 50%.

This provision opened the doors for thousands of women and marginalized citizens to participate directly in urban governance and leadership.

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Duration of Municipalities

Every municipality has a fixed term of five years. Elections must be held before the end of its term.

If a municipality is dissolved before completing five years, elections must be conducted within six months.

This ensures continuity in urban governance and prevents political manipulation.

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Powers, Authority, and Responsibilities of Municipalities

The 74th Amendment gave municipalities the status of self-governing institutions, responsible for preparing plans and implementing programs for economic development and social justice.

According to Article 243W, the state legislature decides the exact powers and responsibilities of municipalities. However, they are generally responsible for the subjects listed in the Twelfth Schedule.

These 18 subjects include:

1. Urban planning

2. Regulation of land use and construction

3. Planning for economic and social development

4. Roads and bridges

5. Water supply for domestic, industrial, and commercial purposes

6. Public health, sanitation, and waste management

7. Fire services

8. Urban forestry and environmental protection

9. Slum improvement and poverty alleviation

10. Safeguarding the interests of weaker sections

11. Urban housing

12. Street lighting

13. Parking and transport systems

14. Public amenities like parks and playgrounds

15. Cattle pounds and animal care

16. Vital statistics — registration of births and deaths

17. Public amenities including streetlights, markets, and libraries

18. Burial and cremation grounds

Essentially, municipalities are responsible for everything that makes urban life function — from clean streets to safe buildings and affordable housing.

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District Planning Committee (DPC)

To ensure better coordination between rural and urban areas, the 74th Amendment introduced the concept of a District Planning Committee (DPC) under Article 243ZD.

The DPC prepares a comprehensive plan for the entire district, combining both Panchayat (rural) and municipal (urban) plans.

This helps in integrated development — so that rural and urban areas grow together rather than separately.

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Metropolitan Planning Committee (MPC)

For large metropolitan areas with multiple municipalities (like Delhi or Mumbai), the amendment created Metropolitan Planning Committees (MPCs) under Article 243ZE.

The MPC prepares development plans for the whole metropolitan region, taking into account the needs of different local bodies and coordinating projects like transport, housing, and water supply.

This was meant to ensure organized development in mega-cities, where multiple agencies often overlap.

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Finance and Revenue of Municipalities

Local governments can’t function without money, and the 74th Amendment made sure municipalities have access to funds.

Municipalities can:

• Collect taxes, duties, tolls, and fees as authorized by state laws.

• Receive grants-in-aid from the state government.

• Get funds based on the recommendations of the State Finance Commission (SFC), which is set up every five years to decide revenue-sharing between the state and local bodies.

This financial structure aims to make municipalities more self-reliant and accountable in managing local resources.

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State Election Commission

Just like the Panchayati Raj system under the 73rd Amendment, the 74th Amendment created an independent State Election Commission (SEC) to conduct free and fair elections to all municipalities.

The State Election Commissioner is appointed by the Governor and is responsible for:

• Preparing electoral rolls.

• Supervising elections.

• Declaring results.

The SEC ensures that local body elections happen regularly and without political interference.

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State Finance Commission

The 74th Amendment also mandates the establishment of a State Finance Commission (SFC) every five years.

The SFC reviews the financial position of municipalities and recommends how:

• Taxes and revenues should be shared between the state and local bodies.

• Grants and funds should be distributed.

• Financial accountability should be maintained.

This ensures that municipalities have adequate and stable financial support to carry out their responsibilities.

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Twelfth Schedule

The Twelfth Schedule of the Constitution lists the 18 functions that are assigned to municipalities.

It is to urban areas what the Eleventh Schedule is to rural areas (under the 73rd Amendment).

The schedule makes municipalities responsible for local planning, health, sanitation, housing, transport, and several other aspects of urban life.

This schedule gives clarity on what local governments are supposed to do — making them active agents of development rather than mere administrative offices.

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Significance of the 74th Amendment

The 74th Amendment is often described as the urban face of Indian democracy. It made local governments not just optional but constitutional.

Its importance can be understood through a few key points:

1. Decentralization of Power – It brought governance closer to the people living in towns and cities.

2. Democratic Participation – Citizens got a direct say in local affairs through elected municipal bodies.

3. Empowerment of Women and Weaker Sections – With reservations, it ensured inclusivity and equality.

4. Transparency and Accountability – Local leaders became directly answerable to the people who elected them.

5. Urban Development and Planning – It created a structure for systematic and long-term planning in cities.

The amendment helped make urban governance people-centric instead of government-centric.

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Achievements of the 74th Amendment

Since the 74th Amendment came into effect, India’s cities have seen several positive developments:

• Regular elections are now held in almost all municipalities.

• Women’s participation has dramatically increased — thousands of women now serve as mayors, councillors, and municipal heads.

• Urban projects like Smart Cities Mission, Swachh Bharat Mission, and AMRUT are implemented more efficiently through local bodies.

• Many cities have developed participatory budgeting, where citizens directly suggest how funds should be spent.

These changes have made urban governance more democratic and responsive to local needs.

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Challenges and Limitations

Despite its success, the 74th Amendment still faces several implementation issues.

1. Limited Financial Autonomy – Municipalities still depend heavily on state governments for funds.

2. Political Interference – State governments often interfere in the functioning of municipalities, limiting their independence.

3. Lack of Professional Staff – Many municipalities lack trained personnel to handle technical tasks like urban planning and waste management.

4. Corruption and Mismanagement – Poor transparency in municipal finances leads to inefficiency.

5. Inequality Between Cities – Larger cities like Delhi and Mumbai are better managed, while smaller municipalities struggle.

These issues show that while the 74th Amendment provided the legal framework, its spirit is yet to be fully realized in practice.

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Relationship Between the 73rd and 74th Amendments

The 73rd and 74th Amendments are twin reforms that together form the backbone of local self-governance in India.

• The 73rd Amendment deals with rural areas (Panchayati Raj).

• The 74th Amendment deals with urban areas (Municipalities).

Together, they create a three-tier democratic structure:

1. Central Government

2. State Government

3. Local Government (Rural + Urban)

This makes India one of the few countries in the world where local governance has constitutional protection.

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Examples of Urban Success Stories

Several cities in India have shown what empowered urban local bodies can achieve:

• Pune introduced participatory budgeting where citizens help plan municipal spending.

• Kochi became one of the cleanest cities through active local planning under the Swachh Bharat program.

• Surat transformed its image from a plague-hit city in 1994 to one of India’s cleanest and best-managed cities — thanks to strong municipal leadership.

These success stories show that when municipalities are given real power and resources, they can transform the quality of urban life.

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Importance of the 74th Amendment in Modern India

In today’s fast-changing world, where more than 35% of Indians live in cities, the 74th Amendment has become more relevant than ever.

It recognizes that cities are the engines of economic growth, and they need effective, democratic, and accountable institutions.

With challenges like pollution, traffic, housing, and urban poverty increasing, local governance must be empowered to respond quickly. The 74th Amendment provides the framework for that — a bottom-up governance model that listens to citizens and acts locally.

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Criticism of the Amendment

Despite its importance, the 74th Amendment is not perfect. Critics argue that:

• The real power still lies with state governments, not municipalities.

• Many states haven’t devolved enough subjects or funds to local bodies.

• Elections are sometimes delayed deliberately.

• The urban poor are often left out of planning decisions.

Experts believe that for the amendment’s true potential to be realized, states must show more willingness to share power and resources with local governments.

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Conclusion

The 74th Constitutional Amendment Act, 1992 marked a major milestone in India’s journey toward grassroots democracy. It brought urban local bodies — the municipalities, municipal councils, and corporations — into the constitutional framework, making them an inseparable part of Indian governance.

It gave power to the people living in cities and towns, ensuring that democracy doesn’t end at the ballot box but continues at the neighborhood level. From roads and sanitation to housing and planning, the amendment made local people responsible for their local problems.

Yes, there are challenges — lack of funds, interference, and capacity issues — but the vision of the 74th Amendment remains one of the most inspiring in Indian democracy. It made cities not just places to live, but communities that govern themselves.

Together with the 73rd Amendment, it completes India’s democratic pyramid — power in the hands of the people, at every level — from Parliament to Panchayats to your nearest street corner.

In simple words, the 74th Amendment gave voice to the urban India — making sure that the heart of democracy beats just as strongly in every lane, ward, and city council as it does in the Parliament of India.