Urban Local Government in India

As Panchayati Raj System is meant for rural area, similarly there are institutions of urban local government. There are three types of urban local bodies.

  1. Municipal Corporations for the big cities
  2. Municipal Councils for all other cities with smaller population
  3. Nagar Panchayats for transitional areas (semi urban areas)

A significant difference between Panchayati Raj Institutions (PRIs) and the urban local bodies is that while the PRIs are closely linked with one another, the urban local bodies are independent. In one State there may be all the three types of urban local bodies: in one big city a Municipal Corporation, in another small city a Municipal Council and in yet another small town a Nagar Panchayat. But they are not linked with one another.

It was during the British colonial rule that the first urban local government came into existence in 1688 when a Municipal Corporation was formed in the city of Madras (now known as Chennai). Later on, similar bodies were formed for the administration at Calcutta (Kolkata) and Bombay (Mumbai). At that time these municipalities were formed to help in the matter of sanitation and prevent epidemics.

These Local bodies also had a few civic functions like managing water supply and drainage. But theses bodies were not given the required powers, finance and authority. Initially most of the members were nominated. National leaders also had felt the importance and need of such an organisation for the local administration and linked these bodies to the planned development of the country. But nothing fruitful could be achieved without finance and the finance was missing.

But even then this system proved to be an effective tool of administration. During the British rule many changes were made in urban local bodies. Gradually certain structural changes were made, powers of the local bodies were enhanced and some funds were also provided.

After independence four types of urban local bodies were functioning: (i) Municipal Corporations, (ii) Municipalities, (iii) Town Area Committees and (iv) Notified Area Committees. But the 74th Constitutional Amendment 1992 brought about major changes in the system of urban local government. Now three types of urban local governments are functioning.

The 74th Constitutional Amendment, 1992

The 74th Constitutional Amendment Act 1992 brought about significant changes in the structure and functioning of urban local government.

  • Constitution of urban local bodies (namely, Municipal Corporation, Municipal Council, and Nagar Panchayat) in every Indian State.
  • Constitution of Wards Committees within the territorial area of a municipality, to ensure people’s participation in civic affairs at the grass-root level.
  • Regular and fair conduct of municipal elections by State Election Commissions.
  • Provision for supersession of municipal governments for not more than 6 months.
  • Adequate representation of weaker sections (i.e., Scheduled Castes, Scheduled Tribes, Backward Classes) of the society and women in municipal governments through reservation of seats.
  • Specification by law, through the State Legislatures, of the powers (including financial) and functional responsibilities to be entrusted to municipalities and wards committees.
  • Constitution of State Finance Commissions, once in every 5 years, to review the financial position of municipalities and to make recommendations on the measures needed to improve their financial position.
  • Constitution of a District Planning Committee at the district level and a Metropolitan Planning Committee in metropolitan areas of every State, for the preparation and consolidation of development plans.

1. Municipal Corporations


Municipal Corporations are established in big cities according to the provisions made in the Acts enacted by the State Legislatures. The Councillors of Municipal Corporations are elected for \five years. The elected Councillors elect one of them as Mayor annually. The Mayor is known as the first citizen of the city.

The 74th Constitutional Amendment has provided for reservation of not less than 1/3rd of the total seats for women. There is also a provision of reservation of seats for Scheduled Castes, Scheduled Tribes and other weaker sections in proportion to their population. Out of these reserved seats for Scheduled Castes and Scheduled Tribes, one-third would be reserved for women belonging to these communities.

In the event of dissolution of Municipal Corporation, the elections are held within six months. There is an official post of Municipal Commissioner, who is the Chief Executive Officer and is appointed by the State government. In case of Union Territories like Delhi it is done by the Central government.

Functions of Municipal Corporations

The main functions of the Municipal Corporation are:

  1. Health and Sanitation: Responsible for cleanliness of the city, disposal of garbage; maintenance of hospitals and dispensaries; promoting and conducting vaccination drives; checking of adulteration etc.
  2. Electricity and Water Supply: Provision and maintenance of street lights, supply of electricity, supply of safe drinking water; construction of infrastructure and providing facilities for water supply, maintenance of water tankers etc.
  3. Educational: Establishment of primary schools, provision of mid-day meals and other facilities for the children.
  4. Public works: Construction, maintenance and naming of roads; framing rules for the constructions of houses, markets, restaurants and hotels; removing of encroachments and demolition of dangerous buildings.
  5. Miscellaneous functions: Maintaining record of Births & Deaths; provision and maintenance of cremation grounds/burial grounds, night shelters; making arrangements of scooter & taxi stands and public facilities.
  6. Discretionary functions:
    • Entertainment: Provision of parks, auditoriums etc.
    • Cultural: Organising music, dramas, painting and other art shows; and activities like maintainace of libraries and museums.
    • Sports Activities: Provision of play grounds for various games and also arranging sports competitions & tournaments.
    • Welfare Services: Setting up and maintaining Community halls; running public distribution system; implementing family welfare schemes and also schemes for the welfare of Scheduled Castes, Scheduled Tribes & backward classes.

Main Functions of Mayor

Mayor is the elected as the head of the Municipal Corporation and performs the following important functions:

  • Presides over the meetings of the Corporation and maintains decorum and discipline in the meetings
  • Acts as a link between Councillors and the State government
  • Receives foreign dignitaries visiting the city

Sources of Income of Municipal Corporation

Like Panchayati Raj System, Muncipal System also requires funds for the development and welfare activities in its area. Provision is made in the Municipal Act for generating the required funds. Some of the sources of income are:

  • Income from taxes: Municipal Corporation imposes taxes on various items such as - house tax, entertainment tax, tax on hoardings and advertisements, registration fees, tax on building plans, etc.
  • Other fees and charges: These include water supply charges, electricity charges, sewer charges, license fee from shop keepers, and toll tax and octoroi duty.
  • Grants-in-Aid: State government and Union government provide grants-in-aid for various projects and programmes related to development.
  • Income from Rents: Corporations rent out the properties and get rent for various shops, kiosks, community centres, Barat Ghars and various sites for fairs, marriages or other exhibitions.

2. Municipal Councils


Cities which do not have very large population have Municipalities known as Municipal Councils to look after the local cities, their problems and developmental work. After the 74th Amendment, the constitution of Municipalities is obligatory for every concerned city. Every Municipal Council has Councillors who are elected by the adult voters of the city for five years. Only those persons can be elected as Councillors who fulfil the conditions laid down by the State Election Commission.

If in any case, the Municipal Council gets dissolved before completing the full term of 5 years, the elections for a new Municipal Council will have to be held within six months. Chairperson or President of the Municipal Council is elected by the Councillors from among the elected members. Chairperson holds the office till he or she enjoys the confidence of the majority of the elected members.

Every Municipal Council has an Executive Officer who is appointed by the State government. He or She looks after the day-to-day work and also the administration. The Health Officer, Tax Superintendent, Civil Engineer are the other important officers.

Functions of the Municipal Council

Functions of the Municipal Council are:

  • Health and Sanitation - Managing cleanliness of the town, disposal of garbage, prevention of sale of unhygienic and adulterated food items, and maintenance of dispensaries or hospitals
  • Electricity and Water Supply - Ensuring supply of electricity and safe drinking water, maintaining water tanks and also water tankers
  • Education - Maintaining and running of primary schools and literacy centres
  • Birth and Death Records - Keeping the records regarding registration of birth and deaths in the city/town and also issuing the certificates for the same
  • Public Works - Paving of streets, repairing and maintenance of municipal roads, construction and maintenance of Barat Ghars, Community Halls, Markets, Public facilities

Sources of Income

No work can be done without money. Municipal Councils have got different sources of income. These sources can be grouped as under:

  • Taxes: Taxes on properties, vehicles, entertainment and advertisement
  • Rents and fees/charges: Charges for water supply, sewer system; Licenses fees, Rents of the community Halls, Barat Ghars and Shops
  • Grants from the State government
  • Fines: Fines from the tax offenders, law breakers, on encroachments

3. Nagar Panchayats

An urban centre with more than 30,000 and less than 100,000 inhabitants has a Nagar Panchayat. However, there are some exceptions. All the previous Town Area Committees (urban centres with a total population of more than 5,000 and less than 20,000) are designated as Nagar Panchayats. It is composed of a Chairperson and Ward Members.

It may have a minimum of ten elected Ward Members and three nominated Members. Like other municipal bodies, Nagar Panchayat is responsible for

  • Cleanliness and disposal of garbage
  • Supply of drinking water
  • Maintenance of public amenities like street lights, parking space and public conveniences
  • Setting up and maintaining fire services
  • Registration of deaths and births

Its sources of income are: Taxes such as house tax, water tax, toll tax; License fees and fee for approving building plans; Rents collected by renting Barat Ghars and other properties; and Grant-in-Aid from the State government.