THE CONSTITUTION (SEVENTY-FOURTH AMENDMENT) ACT, 1992

Statement of Objects and Reasons appended to the Constitution
      (Seventy-third Amendment) Bill, 1991 which was enacted as
       the  Constitution  (Seventy-fourth   Amendment) Act, 1992

                   STATEMENT OF OBJECTS AND REASONS

In  many  States  local  bodies have become weak  and  ineffective  on
account of a variety of reasons, including the failure to hold regular
elections, prolonged supersessions and inadequate devolution of powers
and  functions.   As  a  result, Urban Local Bodies are  not   able  to
perform effectively as vibrant democratic units of self-government.

2.   Having  regard to these inadequacies, it is considered  necessary
that provisions relating to Urban Local Bodies are incorporated in the
Constitution particularly for-

(i)  putting  on a firmer footing the relationship between  the  State
Government and the Urban Local Bodies with respect to-

(a) the functions and taxation powers;  and

(b) arrangements for revenue sharing;

(ii) Ensuring regular conduct of elections;

(iii) ensuring timely elections in the case of supersession; and

(iv)  providing  adequate representation for the weaker sections  like
Scheduled Castes, Scheduled Tribes and women.

3.   Accordingly,  it  is proposed to add a new part relating  to  the
Urban Local Bodies in the Constitution to provide for-

(a) constitution of three types of Municipalities:

(i)  Nagar  Panchayats  for areas in transition from a rural  area  to
urban area;

(ii) Municipal Councils for smaller urban areas;

(iii) Municipal Corporations for larger urban areas.

The  broad criteria for specifying the said areas is being provided in
the proposed article 243-0;

(b) composition  of Municipalities, which will be decided by the
Legislature of a State, having the following features:

(i) persons to be chosen by direct election;

(ii) representation  of Chairpersons of Committees, if any, at ward
or other levels in the Municipalities;

(iii) representation of persons having special knowledge or experience
of Municipal Administration in Municipalities (without voting rights);

(c)  election  of  Chairpersons  of a   Municipality  in  the  manner
specified in the State law;

(d)  constitution of Committees at ward level or other level or levels
within  the  territorial area of a Municipality as may be provided  in
the State law;

(e) reservation of seats in every Municipality-

(i)  for Scheduled Castes and Scheduled Tribes in proportion to  their
population of which not less than one-third shall be for women;

(ii) for women which shall not less than one-third of the total number
of seats;

(iii)  in  favour of backward class of citizens if so provided by  the
Legislature of the State;

(iv) for Scheduled Castes, Scheduled Tribes and women in the office of
Chairpersons as may be specified in the State law;

(f)  fixed  tenure  of 5 years for the   Municipality  and  re-election
within  six  months of end of tenure.  If a Municipality is  dissolved
before  expiration  of  its duration, elections to be  held   within  a
period of six months of its dissolution;

(g) devolution by the State Legislature of powers and responsibilities
upon  the  Municipalities  with respect to preparation  of  plans   for
economic development and social justice, and for the implementation of
development  schemes as may be required to enable them to function  as
institutions of self-government;

(h)  levy  of  taxes and duties by Municipalities, assigning  of  such
taxes and duties to Municipalities by State Governments and for making
grants-in-aid by the State to the Municipalities as may be provided in
the State law;

(i)  a Finance Commission to review the finances of the Municipalities
and to recommend principles for-

(1) determining the taxes which may be assigned to the Municipalities;

(2) Sharing of taxes between the State and Municipalities;

(3)  grants-in-aid to the Municipalities from the Consolidated Fund of
the State;

(j) audit of accounts of the Municipal Corporations by the Comptroller
and  Auditor-General  of  India  and  laying  of   reports  before  the
Legislature of the State and the Municipal Corporation concerned;

(k)  making of law by a State Legislature with respect to elections to
the   Municipalities  to  be   conducted  under   the  superintendence,
direction and control of the chief electoral officer of the State;

(l)  application of the provisions of the Bill to any Union  territory
or  part  thereof with such modifications as may be specified  by  the
President;

(m)  exempting  Scheduled areas referred to in clause (1), and  tribal
areas  referred to in clause (2), of article 244, from the application
of the provisions of the Bill.  Extension of provisions of the Bill to
such areas may be done by Parliament by law;

(n) disqualifications for membership of a Municipality;

(o) bar of jurisdiction of Courts in matters relating to elections to
the Municipalities.

4. The Bill seeks to achieve the aforesaid objectives.

NEW DELHI;                                            SHEILA KAUL.

The 11th September, 1991.

         THE CONSTITUTION (SEVENTY-FOURTH AMENDMENT) ACT, 1992

                              ACT, 1992

                                                [20th April, 1993.]

An Act further to amend the Constitution of India.

BE it enacted by Parliament in the Forty-third Year of the Republic of
India as follows:-

1.   Short  title  and commencement.-(1) This Act may be  called  the
Constitution (Seventy-fourth Amendment) Act, 1992.

(2)  It  shall  come  into  force on  such  date_681  as  the  Central
Government may, by notification in the Official Gazette, appoint.

2.   Insertion of new Part IXA.-After Part IX of the Constitution, the
following Part shall be inserted, namely:-

                              `PART IXA
                          THE MUNICIPALITIES
243P.   Definitions.-In  this  Part,   unless  the   context  otherwise
requires,-

(a) "Committee" means a Committee constituted under article 243S;

(b) "district" means a district in a State;

(c) "Metropolitan area" means an area having a population of ten lakhs
or  more, comprised in one or more districts and consisting of two  or
more Municipalities or Panchayats or other contiguous areas, specified
by  the Governor by public notification to be a Metropolitan area  for
the purposes of this Part;

(d)  "Municipal area" means the territorial area of a Municipality as
is notified by the Governor;

(e) "Municipality" means an institution of self-government constituted
under article 243Q;

(f) "Panchayat" means a Panchayat constituted under article 243B;

(g)  "population"  means  the population as ascertained  at  the  last
preceding census of which the relevant figures have been published.

243Q.   Constitution of Municipalities.-(1) There shall be constituted
in every State,-

(a)  a  Nagar Panchayat (by whatever name called) for  a  transitional
area,  that  is to say, an area in transition from a rural area to  an
urban area;

(b) a Municipal Council for a smaller urban area; and

(c)  a  Municipal Corporation for a larger urban area,

in accordance with the provisions of this Part:

Provided  that a Municipality under this clause may not be constituted
in  such urban area or part thereof as the Governor may, having regard
to  the size of the area and the municipal services being provided  or
proposed  to  be provided by an industrial establishment in that  area
and  such  other factors as he may deem fit, by  public  notification,
specify to be an industrial township.

(2)  In this article, "a transitional area", "a smaller urban area" or
"a  larger  urban  area" means such area as the Governor   may,  having
regard  to  the population of the area, the density of the  population
therein,   the  revenue  generated   for  local   administration,   the
percentage  of employment in non-agricultural activities, the economic
importance or such other factors as he may deem fit, specify by public
notification for the purposes of this Part.

243R.   Composition of Municipalities.- (1) Save as provided in clause
(2), all the seats in a Municipality shall be filled by persons chosen
by  direct  election  from  the   territorial   constituencies  in  the
Municipal  area  and  for this purpose each Municipal  area   shall  be
divided into territorial constituencies to be known as wards.

(2) The Legislature of a State may, by law, provide-

(a) for the representation in a Municipality of-

(i)  persons  having  special   knowledge or  experience  in  Municipal
administration;

(ii)  the  members of the House of the People and the members  of  the
Legislative  Assembly  of the State representing constituencies  which
comprise wholly or partly the Municipal area;

(iii)  the  members of the Council of States and the members  of  the
Legislative  Council  of the State registered as electors  within  the
Municipal area;

(iv)  the Chairpersons of the Committees constituted under clause  (5)
of article 243S:

Provided  that the persons referred to in paragraph (i) shall not have
the right to vote in the meetings of the Municipality;

(b) the manner of election of the Chairperson of a Municipality.

243S.   Constitution  and  composition of Wards  Committees,  etc.-(1)
There shall be constituted Wards Committees, consisting of one or more
wards,  within  the  territorial  area  of  a   Municipality  having  a
population of three lakhs or more.

(2)  The  Legislature  of  a State may, by law,  make  provision  with
respect to-

(a) the composition and the territorial area of a Wards Committee;

(b)  the  manner  in  which the seats in a Wards  Committee  shall  be
filled.

(3)  A  member  of  a   Municipality representing  a  ward  within  the
territorial  area  of  the Wards Committee shall be a member  of   that
Committee.

(4) Where a Wards Committee consists of-

(a)  one ward, the member representing that ward in the  Municipality;
or

(b)  two or more wards, one of the members representing such wards  in
the Municipality elected by the members of the Wards Committee,

shall be the Chairperson of that Committee.

(5) Nothing in this article shall be deemed to prevent the Legislature
of  a  State  from  making  any  provision  for   the  constitution  of
Committees in addition to the Wards Committees.

243T.   Reservation  of  seats.-(1) Seats shall be  reserved  for  the
Scheduled Castes and the Scheduled Tribes in every Municipally and the
number  of seats so reserved shall bear, as nearly as may be, the same
proportion  to  the  total  number of seats to  be  filled   by  direct
election  in  that  Municipality as the population  of  the   Scheduled
Castes  in  the  Municipal  area or of the  Scheduled   Tribes  in  the
Municipal  area  bears to the total population of that area  and  such
seats  may  be allotted by rotation to different constituencies  in  a
Municipality.

(2)  Not  less  than one-third of the total number of  seats  reserved
under  clause  (1) shall be reserved for women belonging to the  Sche-
duled Castes or, as the case may be, the Scheduled Tribes.

(3)  Not  less than one-third (including the number of seats  reserved
for  women belonging to the Scheduled Castes and the Scheduled Tribes)
of  the total number of seats to be filled by direct election in every
Municipality  shall  be  reserved  for women and  such   seats  may  be
allotted by rotation to different constituencies in a Municipality.

(4)  The  officers  of  Chairpersons in the  Municipalities  shall  be
reserved  for the Scheduled Castes, the Scheduled Tribes and women  in
such manner as the Legislature of a State may, by law, provide.

(5)  The  reservation  of  seats under clauses (1)  and  (2)  and  the
reservation of offices of Chairpersons (other than the reservation for
women)  under clause (4) shall cease to have effect on the  expiration
of the period specified in article 334.

(6) Nothing in this Part shall prevent the Legislature of a State from
making  any provision for reservation of seats in any Municipality  or
offices  of  Chairpersons in the Municipalities in favour of  backward
class of citizens.

243U.   Duration  of  Municipalities, etc.-(1)  Every  Municipality,
unless  sooner  dissolved under any law for the time being  in  force,
shall  continue  for five years from the date appointed for its  first
meeting and no longer:

Provided  that a Municipality shall be given a reasonable  opportunity
of being heard before its dissolution.

(2) No amendment of any law for the time being in force shall have the
effect of causing dissolution of a Municipality at any level, which is
functioning  immediately before such amendment, till the expiration of
its duration specified in clause (1).

(3) An election to constitute a Municipality shall be completed,-

(a) before the expiry of its duration specified in clause (1);

(b)  before the expiration of a period of six months from the date  of
its dissolution:

Provided  that  where  the  remainder   of the  period  for  which  the
dissolved  Municipality would have continued is less than six  months,
it  shall not be necessary to hold any election under this clause  for
constituting the Municipality for such period.

(4)  A  Municipality  constituted   upon the  dissolution  of  a  Muni-
cipality before the expiration of its duration shall continue only for
the remainder of the period for which the dissolved Municipality would
have continued under clause (1) had it not been so dissolved.

243V.   Disqualifications  for   membership.-(1)  A  person  shall  be
disqualified  for  being  chosen  as, and for being,  a   member  of  a
Municipality-

(a) if he is so disqualified by or under any law for the time being in
force  for  the purposes of elections to the Legislature of the  State
concerned:

Provided that no person shall be disqualified on the ground that he is
less  than  twenty-five  years of age, if he has attained the  age   of
twenty-one years;

(b)  if  he  is  so  disqualified by or under  any  law  made  by  the
Legislature of the State.

(2)  If  any question arises as to whether a member of a  Municipality
has become subject to any of the disqualifications mentioned in clause
(1), the question shall be referred for the decision of such authority
and in such manner as the Legislature of a State may, by law, provide.

243W.  Powers, authority and responsibilities of Municipalities, etc.-
Subject  to the provisions of this Constitution, the Legislature of  a
State may, by law, endow-

(a)  the  Municipalities  with  such powers and authority  as  may  be
necessary   to   enable   them  to   function    as   institutions   of
self-government and such law may contain provisions for the devolution
of  powers  and responsibilities upon Municipalities, subject to  such
conditions as may be specified therein, with respect to-

(i)  the  preparation  of plans for economic  development  and  social
justice;

(ii) the performance of functions and the implementation of schemes as
may  be  entrusted to them including those in relation to the  matters
listed in the Twelfth Schedule;

(b)  the Committees with such powers and authority as may be necessary
to  enable them to carry out the responsibilities conferred upon  them
including  those  in  relation to the matters listed  in  the   Twelfth
Schedule.

243X.  Power to impose taxes by, and Funds of, the Municipalities.-The
Legislature of a State may, by law,-

(a)  authorise  a Municipality to levy, collect and  appropriate  such
taxes,  duties,  tolls and fees in accordance with such procedure  and
subject to such limits;

(b) assign to a Municipality such taxes, duties, tolls and fees levied
and collected by the State Government for such purposes and subject to
such conditions and limits;

(c)  provide for making such grants-in-aid to the Municipalities  from
the Consolidated Fund of the State;  and

(d)  provide  for constitution of such Funds for crediting all  moneys
received, respectively, by or on behalf of the Municipalities and also
for the withdrawal of such moneys therefrom.

as may be specified in the law.

243Y.   Finance  Commission.-(1)  The Finance  Commission  constituted
under  article  243-I shall also review the financial position of  the
Municipalities and make recommendations to the Governor as to-

(a) the principles which should govern-

(i)  the distribution between the State and the Municipalities of  the
net  proceeds  of  the taxes, duties, tolls and fees leviable  by   the
State,  which  may  be divided between them under this  Part  and   the
allocation  between  the  Municipalities  at   all   levels  of   their
respective shares of such proceeds;

(ii)  the determination of the taxes, duties, tolls and fees which may
be assigned to, or appropriated by, the Municipalities;

(iii)  the  grants-in-aid to the Municipalities from the  Consolidated
Fund of the State;

(b)  the  measures  needed to improve the financial  position  of  the
Municipalities;

(c)  any  other  matter  referred to the  Finance  Commission  by  the
Governor in the interests of sound finance of the Municipalities.

(2)  The  Governor  shall  cause   every  recommendation  made  by  the
Commission  under this article together with an explanatory memorandum
as  to  the action taken thereon to be laid before the Legislature  of
the State.

243Z.  Audit of accounts of Municipalities.-The Legislature of a State
may,  by  law,  make  provisions with respect to  the   maintenance  of
accounts by the Municipalities and the auditing of such accounts.

243ZA.   Elections  to  the Municipalities.-(1)  The  superintendence,
direction  and control of the preparation of electoral rolls for,  and
the conduct of, all elections to the Municipalities shall be vested in
the State Election Commission referred to in article 243K.

(2) Subject to the provisions of this Constitution, the Legislature of
a  State  may,  by  law, make provision with respect  to   all  matters
relating to, or in connection with, elections to the Municipalities.

243ZB.   Application to Union territories.-The provisions of this Part
shall  apply to the Union territories and shall, in their  application
to a Union territory, have effect as if the references to the Governor
of a State were references to the Administrator of the Union territory
appointed  under article 239 and references to the Legislature or  the
Legislative Assembly of a State were references in relation to a Union
territory having a Legislative Assembly, to that Legislative Assembly:

Provided  that the President may, by public notification, direct  that
the provisions of this Part shall apply to any Union territory or part
thereof subject to such exceptions and modifications as he may specify
in the notification.

243ZC.   Part not to apply to certain areas.-(1) Nothing in this  Part
shall  apply to the Scheduled Areas referred to in clause (1), and the
tribal areas referred to in clause (2), of article 244.

(2)  Nothing  in this Part shall be construed to affect the  functions
and powers of the Darjeeling Gorkha Hill Council constituted under any
law  for the time being in force for the hill areas of the district of
Darjeeling in the State of West Bengal.

(3)  Notwithstanding anything in this Constitution, Parliament may, by
law, extend the provisions of this Part to the Scheduled Areas and the
tribal  areas referred to in clause (1) subject to such exceptions and
modifications  as may be specified in such law, and no such law  shall
be  deemed to be an amendment of this Constitution for the purposes of
article 368.

243ZD.    Committee   for   district   planning.-(1)  There  shall   be
constituted  in every State at the district level a District  Planning
Committee  to consolidate the plans prepared by the Panchayats and the
Municipalitiies  in  the district and to prepare a  draft  development
plan for the district as a whole.

(2)  The  Legislature  of  a State may, by law,  make  provision  with
respect to-

(a) the composition of the District Planning Committees;

(b) the manner in which the seats in such Committees shall be filled:

Provided that not less than four-fifths of the total number of members
of  such Committee shall be elected by, and from amongst, the  elected
mambers   of  the  Panchayat  at  the   district   level  and  of   the
Municipalities  in the district in proportion to the ratio between the
population of the rural areas and of the urban areas in the district;

(c) the functions relating to district planning which may be assigned
to such Committees;

(d) the manner in which the Chairpersons of such Committees shall be
chosen.

(3)  Every  District Planning Committee shall, in preparing the  draft
development plan,-

(a) have regard to-

(i)  matters  of  common  interest   between  the  Panchayats  and  the
Municipalities  including spatial planning, sharing of water and other
physical   and  natural  resources,   the  integrated   development  of
infrastructure and environmental conservation;

(ii)  the extent and type of available resources whether financial  or
otherwise;

(b)  consult such institutions and organisations as the Governor  may,
by order, specify.

(4) The Chairperson of every District Planning Committee shall forward
the  development  plan,  as  recommended by  such   Committee,  to  the
Government of the State.

243ZE.   Committee for Metropolitan planning.-(I) There  shall  be
constituted  in  every  Metropolitan   area  a   Metropolitan  Planning
Committee  to  prepare a draft development plan for  the  Metropolitan
area as a whole.

(2)  The  Legislature  of  a State may, by law,  make  provision  with
respect to-

(a) the composition of the Metropolitan Planning Committees;

(b) the manner in which the seats in such Committees shall be filled:

Provided  that  not  less  than   two-thirds of  the  members  of  such
Committee  shall be elected by, and from amongst, the elected  members
of  the  Municipalities  and  Chairpersons of the  Panchayats   in  the
Metropolitan area in proportion to the ratio between the population of
the Municipalities and of the Panchayats in that area;

(c)  the representation in such Committees of the Government of  India
and  the  Government  of  the  State and  of  such   organisations  and
institutions as may be deemed necessary for carrying out the functions
assigned to such Committees;

(d)  the  functions  relating  to planning and  coordination  for  the
Metropolitan area which may be assigned to such Committees;

(e)  the manner in which the Chairpersons of such Committees shall  be
chosen.

(3)  Every  Metropolitan  Planning Committee shall, in  preparing  the
draft development plan,-

(a) have regard to-

(i) the plans prepared by the Municipalities and the Panchayats in the
Metropolitan area;

(ii)  matters  of common interest between the Municipalities  and  the
Panchayats,  including  co-ordinated  spatial planning  of  the   area,
sharing  of  water  and  other physical  and  natural   resources,  the
integrated   development   of     infrastructure    and   environmental
conservation;

(iii)  the overall objectives and priorities set by the Government  of
India and the Government of the State;

(iv)  the  extent and nature of investments likely to be made  in  the
Metropolitan  area  by agencies of the Government of India and of  the
Government  of  the  State  and   other  available   resources  whether
financial or otherwise;

(b)  consult such institutions and organisations as the Governor  may,
by order, specify.

(4)  The  Chairperson of every Metropolitan Planning  Committee  shall
forward the development plan, as recommended by such Committee, to the
Government of the State.

243ZF.    Continuance   of    existing    laws   and   Municipalities.-
Notwithstanding  anything  in  this  Part, any provision  of   any  law
relating  to Municipalities in force in a State immediately before the
commencement of THE CONSTITUTION (Seventy-fourth Amendment) Act, 1992,
which is inconsistent with the provisions of this Part, shall continue
to be in force until amended or repealed by a competent Legislature or
other  competent  authority or until the expiration of one  year  from
such commencement, whichever is earlier:

Provided  that all the Municipalities existing immediately before such
commencement  shall  continue till the expiration of  their  duration,
unless  sooner dissolved by a resolution passed to that effect by  the
Legislative Assembly of that State or, in the case of a State having a
Legislative Council, by each House of the Legislature of that State.

243ZG.   Bar  to  interference   by   courts  in  electoral   matters.-
Notwithstanding anything in this Constitution,-

(a)  the  validity  of  any  law    relating  to  the  delimitation  of
constituencies  or the allotment of seats to such constituencies, made
or  purporting  to be made under article 243ZA shall not be called  in
question in any court;

(b) no election to any Municipality shall be called in question except
by an election petition presented to such authority and in such manner
as  is  provided for by or under any law made by the Legislature of  a
State.'.

3.   Amendment  of article 280.- In clause (3) of article 280  of  the
Constitution, sub-clause (c) shall be relettered as sub-clause (d) and
before sub-clause (d) as so relettered, the following sub-clause shall
be inserted, namely:-

"(c)  the measures needed to augment the Consolidated Fund of a  State
to  supplement the resources of the Municipalities in the State on the
basis  of  the recommendations made by the Finance Commission  of  the
State;".

4.   Addition of Twelfth Schedule.-After the Eleventh Schedule to the
Constitution, the following Schedule shall be added, namely:-

                          "TWELFTH SCHEDULE

                            (Article 243W)

1.  Urban planning including town planning.

2.  Regulation of land-use and construction of buildings.

3.  Planning for economic and social development.

4.  Roads and bridges.

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

6.  Public  health,  sanitation conservancy and solid  waste  manage-
    ment.

7.  Fire services.

8.  Urban  forestry, protection of the environment and  promotion  of
    ecological aspects.

9.  Safeguarding  the  interests  of    weaker  sections  of  society,
    including the handicapped and mentally retarded.

10.  Slum improvement and upgradation.

11.  Urban poverty alleviation.

12.  Provision  of  urban  amenities and facilities  such  as  parks,
     gardens, playgrounds.

13.  Promotion of cultural, educational and aesthetic aspects.

14.  Burials  and burial grounds;   cremations, cremation grounds  and
     electric crematoriums.

15.  Cattle pounds;  prevention of cruelty to animals.

16.  Vital statistics including registration of births and deaths.

17.  Public  amenities  including street lighting, parking  lots,  bus
     stops and public conveniences.

18.  Regulation of slaughter houses and tanneries.''.