The 74th Amendment Act And It's Impact on local bodies

INTRODUCTION - Part IX-A was added to the Constitution by the Constitution (74th
Amendment) Act, 1992. This amendment has added 18 new articles and a new Schedule-Twelfth
Schedule relating to urban local bodies in the Constitution. Like Panchayati Raj Amendment, the
74th Amendment provides for constitutional sanction to the urban self- governing institutions
ensuring regular elections and enabling them to play a greater role in the development of urban
areas. This provides for three types of Municipal Corporations and reservation of seats in every
Municipality for Scheduled Castes, Scheduled Tribes and women. The Amendment empowers
the State Legislature to confer necessary powers and responsibilities upon the Municipalities in
respect of preparation of plants for economics development, levy of taxes and duties by
municipalities.

What is 74th Constitutional Amendment Act?

The 74th Amendment Act of 1992 provides a fundamental framework for the decentralisation of
rights and authorities to Municipal organisations at various levels. The States' responsibility is to
give it a specific form, nevertheless.
The 74th Amendment Act required decentralization of powers and authority to Urban Local
Bodies (ULB) at various levels. Also, this amendment made an effort to create an institutional
framework that would provide access via independent municipal administrations in the country's
cities. The legislation aims to revitalize and improve urban governments so they can function
effectively as local government organizations. The contents of this amendment are contained in
Part IXA, which became effective on June 1,1993.It thus gave local self-government
organizations in urban regions a constitutional foundation. Additionally, it gave the ULBs the
power to do the 18 responsibilities listed in the 12th Schedule of the Indian Constitution.

What goals does the 74th Amendment Act seek to achieve?

The legislation intends to enhance and revitalise municipal governments so that they can
effectively function as local government units. In accordance with the provisions of their
respective constitutions, state governments must implement the new municipal system in
accordance with the Act's requirements.
The statute gave municipalities constitutional protection. They now fall under the protection of
the Constitution's justiciable provisions as a result.
Characteristics of the 74th Amendment Act,1992
The following were the primary changes made by the aforementioned Act:

● Municipalities' Constitution
According to the size and area of each state, the Act allows for the establishment of three
different types of municipalities.
1. Nagar Panchayat (for an area in transition from rural to the urban area);
2. Municipal Council for the smaller urban area; and
3. Municipal Corporation for a larger urban areas.

● Composition of Municipalities
Direct elections will be used to fill the seats. Each municipal region will be divided into
territorial constituencies known as wards for this purpose. The state legislature may specify how
a municipality's chairperson is chosen, as well as the ways in which the following people are
represented there.
o Those with specialized expertise and experience in municipal administration who are not
eligible to vote at municipal meetings.
o The members of the Lok Sabha and the state legislative assembly representing constituencies
that contain entirely or partly the municipal area.
and of the. The the. of the and and of the of the of the and the one that comes with the of the one
that comes with the that comes with the.

● Reservation of seats
Every municipality allocates seats for SC and ST in accordance with its population.
Also, there is a provision for 1/3 of the seats to be reserved for women.
The state legislature has the authority to enact any reservation policies in favour of the
underprivileged class at any level of the municipality.

● Duration of Municipalities
Municipalities have been given five-year terms at every level of administration. Yet, it might be
dissolved before its term is over. If a municipality gets re-elected after being dissolved, it will
continue to function for the remaining period of time that it would have if it hadn't been
dissolved.

● Disqualification of members
A person will be disqualified for the following reasons: if they violate any laws currently in
effect for the state's legislature elections; or if they violate any laws passed by the state
legislature. However, no person shall be disqualified on the ground that he is less than 25 years
of age if he has attained the age of 21 years.
 ● Power and Function
The state legislature has granted the municipalities their responsibilities and authority.
The municipalities create a plan for the municipality's residents' social justice and economic
development. It puts into action the plans created by the federal and state governments to
improve the lives of the populace. Municipalities have the authority to improve job opportunities
and carry out local development projects.

● Finance
The state legislature may award grants-in-aid to the panchayats from the state's consolidated fund
and establish funds to credit all of the panchayats' finances. The state legislature may also permit
a panchayat to levy and collect taxes, duties, duties, and fees.

● Finance Commission
The governor appoints the finance panel to assess the Municipalities’ financial \sstanding.
The governor is advised by this commission to choose the guidelines for how taxes \sshould be
split between the state and municipalities.
It also determines whether taxes, levies, tolls, and other fees can be assessed on municipalities.
The state government has enacted laws requiring the towns to keep accounts and have those
accounts audited.

● Election Method
The State Election Commissions shall be in charge of supervising, directing, and controlling the
preparation of electoral rolls for, and the conduct of, all elections to panchayats and
municipalities.

● Accountancy and audit

The maintenance of municipal accounts and other audits shall be carried out in accordance with
the provisions of State law. State legislatures will be free to make appropriate provisions in this
regard, depending on local needs and the institutional framework available.

● Municipal Revenue
There are five sources of income of the urban local bodies. These are as follows:
1. Tax Revenue
2. Non-Tax Revenue
3. Grants
4. Devolution
5. Loans
 ● Division of Local government

1. Nagar Panchayat: A Nagar Panchayat is for those areas which are transitional
areas i.e. transiting from Rural Areas to Urban areas.
2. Municipal Council: A Municipal council is for smaller urban area
3. Municipal Corporation: A municipal Corporation for Larger Urban Areas

IMPACT ON LOCAL BODIES

Cities and towns have a significant impact on the country's economic growth. These
metropolitan areas significantly contribute to the growth of the rural hinterland. To keep this
economic change in line with local needs and realities, people and their representatives must be
fully involved in programme planning and implementation. If democracy is to remain strong and
stable in the Houses of Parliament and State Legislatures, its roots must extend into the towns,
villages, and cities where people live.Any state may establish one of three types of municipalities
under Article 243Q. The three locations shall be determined by the governor by public notice
based on the population, density of the population, money generated for local government, and
the percentage of non-farm employment. Activities related to agriculture and other elements.
Additionally, if a governor deems it appropriate based on industrial establishments, The governor
may designate a city or township as an industrial township if an industrial facility is providing
municipal services there. A municipality may not be established in such a situation.