UPSC NCERT Notes – Indian Polity – Local Government (Panchayats and Municipalities)

The term “Local Government” encompasses the lowest tiers of public administration within a sovereign state. The constitutional framework for Local Government is outlined in the 73rd and 74th Amendment Acts of 1992 and 1993.

Local Self-Government

• Local Self-Government is the third level of governance alongside the State and Central Government. Rooted in Gandhian philosophy, the concept of Panchayati Raj envisions Village Panchayats as self-governing units. 
• Panchayati Raj Institutions (PRIs) serve as instruments for empowering people, and fostering tangible progress in their socio-economic lives through direct participation in routine administration.

The evolution of Panchayati Raj Institutions

• The evolution of Panchayati Raj Institutions is guided by Article 40 of the Indian Constitution, which mandates the state to organize Village Panchayats and endow them with powers to function as units of self-government.
• Traditionally, Panchayats, led by five elderly wise men, played a crucial role in local administration, utilizing their acumen.
• During the colonial period, influential British authorities like Lord Mayo and Lord Ripon emphasized the role of Panchayats in efficient local administration.
• They made efforts to delegate certain functions to Panchayats, earning Lord Ripon the title of the Father of Local Self-Government.

Committee Recommendations

• Key recommendations from prominent committees are outlined below:

Balwant Rai Mehta Committee

• In 1957, the Government of India formed a committee, chaired by Balwant Rai G Mehta, to assess the Community Development Programme (1952) and the National Extension Service (1953) and propose enhancements. 
• The committee’s November 1957 report introduced the concept of democratic decentralization, known as the Panchayati Raj. 
• It suggested a three-tier Panchayati Raj System—Gram Panchayat at the village level, Panchayat Samiti at the block level, and Zila Parishad at the district level—linked through indirect elections.
• Direct elections were recommended for Panchayat members at each level, with planning and developmental responsibilities entrusted to these bodies.
• The Panchayat Samiti was designated as the executive body, and the Zila Parishad as the advisory and supervisory body.
• The District Collector was proposed as the Zila Parishad Chairman, emphasizing a genuine transfer of power to these democratic bodies.
• The National Development Council (NDC) accepted these recommendations in January 1958, leaving it to states to adapt them to local conditions. 
• Rajasthan pioneered the implementation of Panchayati Raj in Nagaur districts on October 2, 1959, followed by Andhra Pradesh.

K Santhanam Committee

• In 1963, the K Santhanam Committee focused on PRI finance issues, addressing the sanctioning of grants, financial relations between the three tiers of PRIs, and revenue allocation.

Ashok Mehta Committee

• Appointed by the Janata Government in December 1977, the Ashok Mehta Committee submitted its report in August 1978.
• It recommended revitalizing the declining Panchayati Raj System by transitioning from a three-tier to a two-tier system—Zila Parishad at the district level and below it, the Mandal Panchayat for villages with a population up to 20,000. 
• The district became the primary decentralization point under popular supervision. The Zila Parishad assumed executive responsibilities for district-level planning, and Panchayati Raj Institutions gained compulsory taxation powers for financial autonomy. 
• The committee advocated for regular social audits at the district level and oversight by a legislative committee to ensure funds allocated for vulnerable groups were properly utilized. 
• The State Government was discouraged from superseding Panchayati Raj Institutions, with elections mandated within six months in case of supersession. 
• Nyaya Panchayats, focusing on justice, were recommended to operate separately and be presided over by a qualified judge.
• Transferring development functions to the Zila Parishad, with all development staff operating under its control and supervision, is a crucial step. Voluntary agencies must actively engage in garnering support for the Panchayati Raj.
• To ensure focused attention on Panchayati Raj affairs, a dedicated Minister should be appointed within the State Council of Ministers. The reservation of seats for Scheduled Castes (SCs) and Scheduled Tribes (STs) should be based on their population.
• Unfortunately, due to the premature collapse of the Janata Government, the recommendations of the Ashok Mehta Committee at the Central level could not be implemented. Nevertheless, Karnataka, West Bengal, and Andhra Pradesh took initiatives to revitalize the Panchayati Raj, considering some of the Ashok Mehta Committee’s suggestions.

Dantawala Committee:

• Established in 1977, the Dantawala Committee proposed a framework for block-level planning. 
• According to its recommendations, block-level planning should be the appropriate sub-state planning level for a comprehensive understanding of the actual needs of the people.

Hanumantha Rao Committee:

• Formed in 1984, the Hanumantha Rao Committee advocated for separate district planning bodies, either under the District Collector or a Minister.

GVK Rao Committee:

• Constituted in 1985 by the Planning Commission, the GVK Rao Committee identified the bureaucratization and detachment of the development process from the Panchayati Raj.
• It recommended elevating Zila Parishad as the key body for democratic decentralization, assigning specific roles to district and lower levels, and creating the position of District Development Commissioner as the Chief Executive Officer of the Zila Parishad.

LM Singhvi Committee:

• Appointed in 1986 by the Rajiv Gandhi Government, the LM Singhvi Committee proposed constitutional recognition, protection, and preservation of Panchayati Raj Institutions.
• It suggested adding a new chapter to the Constitution and establishing Nyaya Panchayats for clusters of villages. 
• The importance of Gram Sabha as the embodiment of direct democracy was emphasized, along with the need for more financial resources for Village Panchayats. 
• Judicial tribunals were recommended to address controversies about Panchayat elections.

Thungon Committee:

• Established in 1988 under the leadership of PK Thungon, the Thungon Committee investigated the political and administrative organization in the district and district planning.
• It urged the strengthening and constitutional validation of the Panchayati Raj System.

Gadgil Committee:

• Established in 1989 under the leadership of VN Gadgil, the committee focused on formulating policies and programs for Panchayats. It delved into strategies to enhance the effectiveness of Panchayati Raj Institutions, presenting key recommendations:
• Panchayati Raj Institutions should have a fixed five-year term.
• Members of the Panchayats at all three levels should be directly elected.
• The responsibility for preparing and executing socio-economic development plans should rest with Panchayati Raj authorities, with a designated list of subjects in the Constitution.
• Taxation and duties should be administered, collected, and managed by Panchayat Raj entities.
• The establishment of a State Finance Commission to oversee fund distribution to the Panchayats.
• The formation of a State Election Commission to supervise the conduct of Panchayat elections.

Constitutionalization of Panchayati Raj Institutions:

• The Rajiv Gandhi Government introduced the 64th Constitutional Amendment Bill in July 1989 to constitutionalize Panchayati Raj Institutions, making them more potent and inclusive. However, it did not pass Parliament. A second attempt by the VP Singh Government in November 1989 lapsed with the fall of the government.
• The Narasimha Rao Government introduced the Constitutional Amendment Bill in September 1991.
• The bill passed in the Lok Sabha on December 22, 1992, and in the Rajya Sabha on December 23, emerging as the 73rd Constitutional Amendment Act, 1992, enforced from April 24, 1993.

Salient Features of the Act:

• Corresponding to Part IX of the Constitution of India, the Act introduced the Eleventh Schedule, encompassing 29 functional items for Panchayats.
• Granting Constitutional Status to Panchayati Raj Institutions.
• State Governments are constitutionally obligated to adopt the new Panchayati Raj System in line with the Act.
• Panchayat formation and regular elections are not contingent on the will of the State Government.
• The Act’s provisions can be categorized into compulsory, required in State Laws (timely elections, reservations, etc.), and voluntary, at the discretion of states (devolution of powers, taxes, etc.).

Provisions of the Act

• The Act encompasses several provisions:

Gram Sabha:

• By Article 243A, the Gram Sabha constitutes individuals registered in the electoral rolls of the village within the Panchayat’s jurisdiction at the village level.
• It functions as a Village Assembly comprising all registered voters in the Panchayat area, wielding powers and performing functions as determined by the State Legislature.
• Gram Sabha convenes at least twice annually, with a quorum set at one-tenth of the total members.

Three-tier System:

• As stipulated in Article 243B, the Act establishes a three-tier system of Panchayats at the village, intermediate block, and district levels, except in states with a population below 20 lakhs.

Election of Members and Chairpersons:

• Article 243C mandates the direct election of all Panchayat members at the village, intermediate, and district levels by the people.
• Chairpersons at the intermediate and district levels are indirectly elected from among the elected members.
• The election of a village-level Panchayat Chairperson is determined by the State Legislature.

Reservation of Seats:

• In line with Article 243D, the Act provides for the reservation of seats for Scheduled Castes and Scheduled Tribes in every Panchayat, proportionate to their population in the Panchayat area.
• The Act mandates the reservation of not less than one-third of the total seats for women, including those reserved for women from SCs and STs.
• The Legislature of a State is authorized to reserve seats in any Panchayat or Chairperson offices at any level in favor of backward

Duration of Panchayats:

• As per Article 243E, Panchayats at all levels have a standard tenure of five years. However, they can be dissolved before completing their term. 
• Fresh elections to constitute a Panchayat must be completed before the expiry of its five-year term or, in case of dissolution, within six months from the date of dissolution.

Disqualifications:

• Article 243F outlines disqualifications for Panchayat membership, disqualifying individuals as follows:
• Under any current election laws for the state legislature.
• Under any laws enacted by the State Legislature.
• No person shall face disqualification on the grounds of being less than 25 years of age if they have attained the age of 21 years. Disqualification matters are referred to the authority determined by the State Legislature.

Powers and Functions:

• Article 243G empowers the State Legislature to grant Panchayats the necessary powers and authority to function as self-government institutions.
• This scheme may include provisions for devolving powers and responsibilities to Panchayats at the appropriate level, particularly in the preparation of plans for economic development and social justice.
• Panchayats are entrusted with the implementation of schemes for economic development and social justice, including those related to the 29 matters listed in the Eleventh Schedule.

Financial Arrangements

• Articles 243 Hand 243 L empower the State Legislature to enact laws enabling a Panchayat to impose, collect, and utilize taxes, duties, tolls, and fees.
• The State Legislature can assign to a Panchayat the taxes, duties, tolls, and fees imposed and collected by the State Government.
• It can also allocate grant-in-aid to the Panchayats from the State Consolidated Fund and establish funds to cover their financial needs.

State Finance Commission

• According to Article 243 1, the Governor of a State must establish a Finance Commission to assess the financial status of the Panchayats every five years. The commission provides recommendations to the Governor on:
• Principles governing the distribution of net proceeds of state-imposed taxes, duties, tolls, and fees between the States and Panchayats.
• Principles for determining taxes, duties, tolls, and fees assigned to the Panchayats.
• Principles for grants-in-aid to the Panchayats from the State Consolidated Fund, along with measures to enhance their financial position.
• The Central Finance Commission also proposes measures to augment the State Consolidated Fund to support Panchayats’ resources. The Governor presents the State Finance Commission’s recommendations to the State Legislature.

Audit of Panchayat Accounts

• As per Article 243 J, the State Legislature may establish provisions regarding the maintenance and auditing of Panchayat accounts.

State Election Commission

• According to Article 243K, the State Election Commission is entrusted with the supervision, direction, and control of electoral roll preparation and Panchayat election conduct.
• It comprises a State Election Commissioner appointed by the Governor.
• The Commissioner’s conditions of service and tenure are determined by the Governor.
• The Commissioner can only be removed following the prescribed procedure and grounds for removing a State High Court Judge.
• The Commissioner’s conditions of service cannot be altered to their detriment after appointment.

The Eleventh Schedule

• Under Article 243 G, the Eleventh Schedule outlines 29 functional items within Panchayats’ jurisdiction:
  • Agriculture, including agricultural extension
  • Land improvement, implementation of land reforms, land consolidation, and soil conservation
  • Minor irrigation, water management, and watershed development
  • Animal husbandry, dairying, and poultry 
  • Fisheries
  • Social forestry and farm forestry
  • Minor forest produce
  • Small-scale industries, including food processing industries
  • Khadi, village, and cottage industries
  • Rural housing
  • Drinking water
  • Fuel and fodder
  • Roads, culverts, bridges, ferries, waterways, and other means of communication
  • Rural electrification, including electricity distribution
  • Non-conventional energy sources
  • Poverty alleviation programs
  • Education, including primary and secondary schools
  • Technical training and vocational education
  • Adult and non-formal education
  • Libraries
  • Cultural activities
  • Markets and fairs
  • Health and sanitation, including hospitals, primary health centers, and dispensaries
  • Family welfare
  • Women and child development
  • Social welfare, including the welfare of the handicapped and mentally retarded 27
  • Welfare of the weaker sections and, in particular, the Scheduled Castes and Scheduled Tribes
  • Public distribution system
  • Maintenance of community assets

Mandatory Provisions

• Establishment of Gram Sabha in every village and the creation of a three-tier Panchayati Raj System at the District, Block, and Village levels.
• Direct elections to fill almost all posts at all levels, with the Chairperson positions at the Zila Parishad and block levels filled through indirect election.
• The minimum age for contesting Panchayat elections is set at 21 years.
• Reservation of seats for Scheduled Castes/Scheduled Tribes in Panchayats proportionate to their population, and one-third of seats reserved for women.
• Creation of a State Election Commission in each State to conduct Panchayat elections.
• The tenure of Panchayats at all levels is five years, and if dissolved earlier, fresh elections must be held within six months.
• Establishment of a State Finance Commission in each state every five years.

Voluntary Provisions

• Representation of Members of Parliament and State Legislature in Panchayats within their constituencies.
• Reservation of seats (both members and chairpersons) for backward classes in Panchayats at any level.
• Devolution of powers and responsibilities to Panchayats for economic development and social justice under the 11th Schedule.
• Assignment of taxes, duties, tolls, and fees levied and collected by the State Government to Panchayats.
• Grants-in-aid to Panchayats from the Consolidated Fund of the State.

Panchayats Extension to Scheduled Areas Act, 1996 (PESA)

• The 73rd Amendment Act, 1992 did not apply to Five Schedule and six areas. Consequently, the PESA Act, 1996 was enacted based on the Bhuria Committee’s report and came into operation on December 24, 1996.
• The Ministry of Panchayati Raj is the nodal ministry for implementing its provisions in states.
• This Act extends Panchayats to the tribal areas of nine states, namely, Andhra Pradesh, Chhattisgarh, Gujarat, Himachal Pradesh, Jharkhand, Maharashtra, Madhya Pradesh, Odisha, and Rajasthan. It aims to provide self-rule to the tribal people and allow them to govern themselves and their resources.
• All State Governments have enacted their State Legislations in line with the PESA Act, 1996. The Act grants significant governance powers to the tribal community and recognizes its traditional community rights over local natural resources.
• It not only acknowledges the validity of customary law, social and religious practices, and traditional management practices of community resources but also prohibits the State Government from making any law inconsistent with these.

Features of the PESA Act

• Customary law, social and religious values, and traditional community resource management practices must be considered while drafting State Legislation governing Panchayats in Scheduled Areas.
• Every village must have a Gram Sabha responsible for defending and preserving the people’s customs, practices, cultural identity, local resources, and conventional dispute resolution techniques.
• Gram Sabha approves plans, programs, and projects for social-economic development.
• Each Village Panchayat needs a Gram Sabha certificate confirming fund usage for designated plans, activities, and projects.
• The number of seats reserved for Scheduled Areas in each Panchayat must be equivalent to the population of the communities, with a minimum of 50% of available seats reserved.
• Chairperson positions at all levels will be reserved for members of Scheduled Tribes.
• Consultation with the Gram Sabha or Panchayats at the relevant level is mandatory before acquiring land in Scheduled Areas.
• The State Government may nominate Scheduled Tribes candidates for election to the intermediate or district-level Panchayat without representation. However, the total number of nominees for Panchayat’s election cannot exceed one-tenth.
• The Gram Sabha or Panchayats at the appropriate level must make recommendations for granting a prospecting license or mining lease for minor minerals in the Scheduled Areas.
• Gram Sabha is specifically endowed with the following powers:
• The power to enforce prohibition or regulate/restrict the sale and consumption of any intoxicant.
• Ownership of minor forest produce.
• The power to prevent alienation of land in the scheduled areas and take appropriate action to destroy any unlawfully alienated land of a Scheduled Tribes.
• The power to manage village markets by any name.
• The power to exercise control over money lending to the Scheduled Tribes.
• The power to exercise control over institutions and functionaries in all social sectors; control over local plans and resources for such plans, including tribal sub-plans.
• State legislations must include safeguards to prevent higher-level Panchayats from assuming powers and authority of lower-level Panchayats or Gram Sabha.
• When establishing the administrative framework for district-level Panchayats in Scheduled Areas, the State Legislature shall endeavor to adhere to the pattern of the Constitution’s Sixth Schedule.
• Any provision of any law (relating to Panchayats in Scheduled Areas) inconsistent with the Act shall cease to be in force one year from the date on which this Act receives the President’s assent.

Urban Government

• In urban areas, local self-government units are known as municipalities. The term urban local government in India refers to the process by which people, through elected officials, govern an urban region.
• The system of urban government was constitutionalized through the 74th Constitutional Amendment Act of 1992. Urban local governments can only regulate specific urban areas designated by the State Government.
• Urban local government is overseen by the following three ministries:
  • Ministry of Housing and Urban Affairs (States).
  • Ministry of Defence (Cantonment Boards).
  • Ministry of Home Affairs (Union Territories).

Evolution of Urban Local Bodies in India

• Municipal organizations have a long history in India.
• The first Municipal Corporation was established in the former Presidency Town of Madras in 1688. Similarly, corporations were later established in Bombay and Calcutta in 1726.
• The establishment of local self-government institutions was envisioned in Lord Mayo’s Resolution on financial decentralization in 1870, also known as the Magna Carta of Urban Self-Governance.
• The first urban local government in India was the Municipal Corporation in Madras, established by a charter granted in 1687.
• The Royal Commission on Decentralization was appointed in 1907 and submitted its report in 1909, with Hobhouse serving as its Chairman.
• According to the Government of India Act, of 1919, under the monarchical system, local self-government was transferred to the purview of an Indian Minister with the appropriate authority.
• The protection of democracy in Parliament and States is explicitly outlined in the Indian Constitution. However, the Constitution did not explicitly mandate local self-government in metropolitan areas.

74th Constitutional Amendment Act, 1992

• Constitutional status for municipalities was established through the 74th Constitutional Amendment Act of 1992, which became effective on June 1, 1993. 
• This Act introduced Part-IX (A) to the Constitution of India and added the Twelfth Schedule to the Constitution. The Act encompasses 18 functional items for municipalities, spanning from Articles 243P to 243ZG, bringing them under the justifiable part of the Constitution.
• The Act aims to establish a uniform framework for urban local bodies and enhance their capacity to function as effective democratic units of self-government.

Constitution of Municipalities

• According to Article 243Q, the following shall be constituted in every state:
• A Nagar Panchayat for a transitional area, transitioning from a rural to an urban area.
• A Municipal Council for a smaller urban area.
• A Municipal Corporation for a larger urban area by the provisions of this part.

Composition of Municipalities

• As per Article 243R, all seats in a municipality shall be filled by persons chosen by direct election from territorial constituencies in the municipal area.
• Each municipal area shall be divided into territorial constituencies known as Wards. 
• The Legislature of a State may, by law, provide for the representation in a municipality of persons with special knowledge or experience in municipal administration, members of the House of the People, members of the Legislative Assembly, members of the Council of States, members of the Legislative Council of the State, and Chairpersons of Committees constituted under Clause (5) of Article 243S.

Wards Committees

• Article 243S provides for Wards Committees, constituted within the territorial area of a municipality having a population of 3 lakhs or more. 
• The Legislature of a State may make provisions regarding the composition and territorial area of a Wards Committee, as well as how seats in a Wards Committee shall be filled.

Reservation of Seats

• Article 243T provides for the reservation of seats for Scheduled Castes and Scheduled Tribes in every municipality in proportion to their population in the municipal area. 
• It also mandates the reservation of not less than one-third of the total number of seats for women, including those reserved for women belonging to SCs and STs. The State Legislature may make provisions for the reservation of seats for the offices of chairpersons in municipalities for SCs, STs, and women.

Duration of Municipalities

• Article 243U stipulates that every municipality has a five-year tenure, and before dissolution, it is provided a fair opportunity to be heard. If a municipality is dissolved earlier than the required five years, elections must be held within six months to constitute the municipality.
• A municipality formed upon the dissolution of another municipality before the completion of its tenure shall only continue for the remaining period that the dissolved municipality would have served had it not been dissolved.

Disqualification of Members

• According to Article 243V, a person shall be disqualified from being chosen as a member of a municipality if disqualified under any currently effective law for State Legislature elections.
• It also specifies that a person under 25 years of age, who has attained the age of 21, shall not be disqualified unless a State law passed by the State Legislature imposes such disqualification. 
• If there is uncertainty regarding a member’s disqualification, the matter shall be referred to the authority designated by the State Legislature for judgment.

State Election Commission

• The State Election Commission is entrusted with the superintendence, direction, and control of the preparation of electoral rolls and the conduct of all municipality elections. The State Legislature may legislate on all matters related to municipality elections.

Powers and Functions of Municipalities

• Article 243W empowers municipalities with the necessary powers and authorities for self-governance. The law also outlines the devolution of powers and responsibilities to municipalities, including the preparation of plans for economic development and social justice, and the implementation of schemes listed in the Twelfth Schedule.
• Committees are endowed with powers necessary to fulfill their responsibilities, including those related to the matters listed in the Twelfth Schedule.

Financial Provisions

• Article 243X grants the State Legislature the authority to authorize a municipality to levy, collect, and appropriate taxes, duties, tolls, and fees within specified procedures and limits. 
• The State Legislature may assign such taxes, duties, tolls, and fees collected by the State Government to municipalities, subject to conditions and limits.
• The State Legislature may also provide grants-in-aid to municipalities from the Consolidated Fund of the State. It can establish funds for crediting all received monies by or on behalf of the municipalities and specify the withdrawal procedures.

Finance Commission

• Article 243Y dictates that the Finance Commission, responsible for Panchayats, shall also review the financial position of municipalities every five years. 
• It recommends principles governing the distribution of net proceeds of state-imposed taxes, duties, tolls, and fees between states and municipalities. It also suggests principles for determining taxes, duties, tolls, and fees assigned to municipalities, as well as principles for grants-in-aid from the Consolidated Fund of the State.
• The State Legislature may legislate on the composition, qualifications, and selection procedures of the Commission. 
• The Governor presents the Commission’s recommendations, along with the action taken report, before the State Legislature.
• The Central Finance Commission will also propose measures to enhance the Consolidated Fund of the State, supplementing the resources of municipalities in the states based on recommendations made by the State Finance Commission.

Audit of Accounts

• According to Article 243Z, the State Legislature may establish provisions regarding the maintenance of accounts by municipalities and the auditing of such accounts.

Application to Union Territories

• As per Article 243ZA, the provisions of this part apply to Union Territories. However, the President may direct their application to a Union Territory with exceptions and modifications as specified.

Exempted Areas

• Under Article 243ZB, the Act does not apply to scheduled areas and tribal areas in the states.
• It also does not impact the functions and powers of the Darjeeling Gorkha Hill Council of West Bengal. Nevertheless, Parliament may extend the provisions of this part to the Scheduled Areas and Tribal Areas with specified exceptions and modifications.
• The 74th Amendment Act provided for Compulsory and Voluntary Provisions for Municipalities as follows:

Compulsory Provisions

• Establishment of Nagar Panchayats, Municipal Councils, and Municipal Corporations in urban areas.
• Reservation of seats (both members and chairpersons) for SCs, STs, and OBCs in Municipalities at all three levels.
• Reservation of one-third seats (both members and chairpersons) for women in Municipalities at all three levels.
• Fixing a tenure of five years for Municipalities at all levels and holding fresh elections within six months in the event of supersession of any Municipality.
• Establishment of a State Election Commission for conducting elections to the Municipalities.
• Constitution of a State Finance Commission every five years to review the financial position of the Municipalities.

Voluntary Provisions

• Representation of members of Parliament and State Legislature in Municipalities at different levels within their constituencies.
• Reservation of seats (both members and chairpersons) for backward classes in Municipalities at any level.
• Devolution of powers and responsibilities upon Municipalities to prepare plans for economic development and social justice, and to perform some or all functions listed in the Twelfth Schedule of the Constitution.
• Granting financial powers to Municipalities, authorizing them to levy, collect, and appropriate taxes, duties, tolls, and fees.

Committee for District Planning

• As per Article 243ZC, there shall be constituted a District Planning Committee in every state at the district level to consolidate plans prepared by Panchayats and Municipalities in the district and to prepare a Draft Development plan for the district as a whole. 
• The Legislature of a State may make provisions regarding the composition of District Planning Committees, specifying that four-fifths of the total members of such a committee shall be elected by the elected members of the District Panchayat and Municipalities in the district, functions related to district planning assigned to such committees, and the manner in which the Chairpersons of such committees shall be chosen.
• Each District Planning Committee formulates a preliminary development plan addressing common interests shared between Panchayats and Municipalities. This plan encompasses spatial planning, equitable distribution of water and other natural resources, as well as the integrated development of infrastructure and environmental conservation.
• The committee tailors the draft development plan based on the available resources, whether financial or otherwise, and seeks input from institutions and organizations specified by the Governor through an official order.
• Subsequently, the Chairperson of each District Planning Committee forwards the recommended development plan to the State Government.

Committee for Metropolitan Planning

• Article 243ZE mandates the establishment of a Metropolitan Planning Committee in each metropolitan area to formulate a comprehensive development plan for the entire metropolitan region. 
• The State Legislature is empowered to make provisions regarding:
• The composition of Metropolitan Planning Committees, including the method for filling the seats. It stipulates that at least two-thirds of the committee members must be elected representatives from Municipalities in the metropolitan area.
• The representation of the Government of India, the State Government, and designated organizations in these committees.
• Defining the functions related to planning and coordination for the metropolitan area, including the selection process for the Chairpersons of such committees.
• Every Metropolitan Planning Committee, during the preparation of the draft development plan, is required to consider plans developed by Municipalities and Panchayats in the metropolitan area.
• This includes coordinated spatial planning, resource sharing, integrated infrastructure development, and environmental conservation, focusing on matters of common interest between Municipalities and Panchayats.
• The committee also takes into account the overall objectives and priorities set by the Government of India and the State, as well as the anticipated investments in the metropolitan area by government agencies. 
• The Metropolitan Planning Commission consults institutions and organizations specified by the Governor.
• The Chairperson of each Metropolitan Planning Committee then forwards the recommended development plan to the State Government.

Continuance of Existing Laws and Municipalities

• According to Article 243ZF, all state laws about Municipalities will remain effective until one year from the commencement of this Act.
• Existing Municipalities at the outset of this Act will persist until the conclusion of their term unless dissolved by the State Legislature.

Interference in Electoraldeildu Matters of the Courts

• Article 243ZG stipulates that the legitimacy of any law regarding constituency delimitation or seat allocation, enacted or purportedly made under Article 243ZA, cannot be challenged in any court. Challenges to Municipal elections can only be raised through an election petition, presented to the designated authority, following the procedures outlined by the Legislature of a State.

The Twelfth Schedule

• The Twelfth Schedule, outlined in Article 243W, encompasses 18 functional items designated for municipalities, including urban planning, regulation of land use, economic and social development planning, roads and bridges, water supply, public health, sanitation, waste management, fire services, urban forestry, environmental protection, and support for weaker sections of society.
• This schedule also includes provisions for slum improvement, urban poverty alleviation, amenities and facilities, cultural and educational promotion, burial and cremation services, cattle pounds, vital statistics, public amenities, and the regulation of slaughterhouses and tanneries.

Various types of urban local governments exist in India:

Municipal Corporation:

• Established for large cities like Delhi, Mumbai, Kolkata, Hyderabad, and Bangalore.
• Three authorities: Council, Standing Committees, and Commissioner.
  • Council is the deliberative and legislative wing, headed by a Mayor, and also includes nominated members
  • Standing Committees facilitate council functions.
  • The Municipal Commissioner, appointed by the State Government, serves as the Chief-Executive authority.

Municipality:

• Created for the administration of towns and smaller cities.
• Similar structure to Municipal Corporation, with a Council, Standing Committees, and Chief-Executive Officer.
• The Council, led by a President or Chairman, is the deliberative and legislative wing.
• Chief-Executive Officer, appointed by the State Government, oversees day-to-day administration.

Notified Area Committee:

• Established through government notification, not legislation.
• All members and the chairman are appointed by the State Government, not elected.
• Formed to administer areas undergoing rapid industrialization or not yet meeting conditions for municipality creation.
• Neither an elected nor statutory body.
• These distinctions reflect the diverse governance structures catering to the varying needs and sizes of urban areas in India.

Town Area Committee:

• A Town Area Committee is established to administer small towns. Enacted by the State Legislature, it can comprise both elected and nominated members. 
• Operating as a quasi-municipality, it undertakes a limited set of municipal functions such as street lighting and sanitation. 
• The composition may be a combination of elected and government-nominated members.

Cantonment Board:

• Functioning as autonomous bodies under the supervision of the Ministry of Defence, Cantonment Boards were established by the Central Government through the Cantonment Act of 2006. 
• This partially elected and partly nominated body has its ex-officio President as the military officer commanding the station.
• The Vice-President is selected from elected members, and the executive officer is appointed by the President of India. 
• Elected members serve a five-year term, while nominated members continue as long as they hold their office in that station.
• Currently, there are 62 Cantonment Boards in the country, with limited resources due to government-owned property on which no taxes can be imposed.
• Financial assistance, in the form of grants-in-aid, is provided by the Central Government. The boards are tasked with mandatory duties, including public health, sanitation, primary education, and street lighting.

Township

• This organization is set up to furnish essential services to its employees and residents in the nearby colonies of the plant, primarily managed by prominent public enterprises.
• Administrator The town administers this entity, with appointees from the enterprises.

Port Trust

• Parliament enacted this body to oversee and safeguard ports, as well as provide civic amenities in port regions.
• It comprises both elected and appointed members, with an officer serving as the chairman.
• Its civic responsibilities closely mirror those of a municipality.

Special Purpose Agency

• Created for a specific purpose, often as statutory bodies by state legislation or as departments through executive resolutions—examples include Housing Boards, Pollution Control Boards, Urban Development Authorities, and Town Improvement Trusts.
• Not subordinate to local municipal bodies.

Municipal Revenue Sources

Revenue Sources	Tax Revenue
Description	It mobilizes revenue through the power to levy and collect
	taxes and fees, including property tax, fire-brigade tax,
	taxes on vehicles, taxes on boats, education cess,
	development fees, and rent on municipal property.
Non-Tax Revenue	Non-tax revenue for Municipalities comes from user charges
	and fees from building permissions and trade licensing.
Devolution	Finance Commission reviews the financial position of urban
	local bodies and makes recommendations on the distribution
	of resources between the State and urban bodies, as well as
	the determination of taxes, duties, etc.
Grants	Grants are funds allocated by the Centre and States for
	sanitation and drinking water under the Centrally Sponsored
	Schemes.
Loans	Municipalities can raise loans from State Governments and
	various financial institutions to meet their expenditure.

Central Council of Local Government

• The Central Council of Local Government was established in 1954 under Article 263 of the Indian Constitution by an order of the President of India. 
• This advisory body comprises the Union’s Minister of Urban Development and the State’s Minister of Local Self-Government, with the Union Minister serving as the Council’s Chairman.
• The Council’s functions include considering and recommending policy matters, proposing legislation, formulating a common program of action, and exploring possibilities of cooperation between the Centre and the States.
• Additionally, it recommends Central Financial Assistance and reviews the work done by local bodies with such assistance.

Co-operative Societies

• In 1958, the National Development Council recommended a national policy on cooperatives, a movement strongly supported by Jawaharlal Nehru. 
• The 97th Constitutional Amendment Act, of 2011 granted constitutional status to cooperatives, inserting them into Part IX (B) covering Articles 243ZH and ZT.
• Article 243ZI allows states to make provisions for the incorporation, regulation, and winding-up of cooperative societies, emphasizing voluntary formation, democratic member control, economic participation, and autonomous functioning.

Term of Members of the Board

• Under Article 243ZJ, the board of a cooperative society consists of several directors as per state legislation, not exceeding twenty-one. 
• Provisions for reservation of seats for Scheduled Castes, Scheduled Tribes, and women are mandated. Elected members serve a five-year term, and the legislature must include individuals with experience in banking, management, finance, or relevant fields on the board.

Election of Members of the Board

• Article 243ZK dictates that the superintendence, direction, and control of the preparation of electoral rolls and the conduct of elections to a cooperative society lie with an authority or body determined by the State Legislature.

Audit of Accounts of Co-operative Societies

• Under Article 243ZM, the legislature may establish provisions for maintaining accounts and auditing cooperative societies’ accounts at least once in each financial year. Audit reports are to be laid before the State Legislature or as provided by law within six months of the financial year’s close.

Offences and Penalties

• State legislatures have the authority to enact laws specifying offenses and penalties for acts such as willfully submitting false returns or providing false information, disobeying summons or orders, failing to pay deducted amounts to a cooperative society, failing to hand over custody of essential items, and adopting corrupt practices before, during, or after elections.

Prelims Facts

• Introduction: The Panchayati Raj System commenced in 1959 [Mizoram PSC (Pre) 2016].
• Constitutional Status: The 73rd Constitutional Amendment granted constitutional status to the Panchayati Raj institution [WBCS (Pre) 2022].
• Nomenclature Origin: The term ‘Panchayati Raj’ was suggested by Mahatma Gandhi [UP RO/ARO (Pre) 2017].
• Constitutional Location: Panchayati Raj provisions are implemented in Part 9 of the Constitution [MPPSC (Pre) 2019].
• Features: The Panchayati Raj System is characterized by a three-tier structure, direct elections, and reserved seats [BPSC (Pre) 1992, WBCS (Pre) 2017, APSC (Pre) 2018].
• State List Inclusion: Panchayati Raj is mentioned in the State list [BPSC (Pre) 2005, UKPSC (Pre) 2016, MPPSC (Pre) 2019].
• Grass Root Democracy Theme: Panchyati Raj System relates to the theme of ‘Grass Root Democracy’ [UPPSC (Mains) 2013].
• Local Self-Government: It represents decentralization of powers [BPSC (Pre) 2000, 2014].
• Fundamental Objective: The primary goal is to ensure people’s participation and democratic decentralization [UP Lower 1998, IAS (Pre) 2015, 2017].
• Adoption Order: Rajasthan and Andhra Pradesh were the first states to adopt the Panchayati Raj form of local self-government [BPSC (Pre) 2005, MPSC (Pre) 2005, IAS (Pre) 2009, UPPSC (Pre) 2012].
• Legislative Authority: The legislature of the state is authorized to make provisions regarding Panchayat composition [UPPSC (Pre) 2016].
• Three-tier Structure: The Panchayati Raj system consists of Gram Panchayat, Panchayat Samiti, and Zila Parishad [BPSC (Pre) 2001, 2002, Odisha PSC (Pre) 2011].
• Election Timeline: If a Panchayat is dissolved, elections are to be held within six months [UPPSC (Pre) 2009, UKPSC (Pre) 2022].
• Election Oversight: The State Election Commission has superintendence, direction, and control over Panchayat elections [UPPSC (Pre) 2020].
• Architect: BR Mehta is considered the Architect of Panchayati Raj in India [BPSC (Pre) 2006, UPPSC (Pre) 2007].
• Planning Recommendation: Decentralized planning on the basis of institutions was recommended by the Panchayati Raj Balwant Rai Mehta Committee [IAS (Pre) 2011, BPSC (Pre) 2011, MPPSC (Pre) 2014, 2016].
• First State to Implement: Madhya Pradesh was the first state to implement the 73rd Constitutional Amendment [MPPSC (Pre)].
• Reservation Provision: Article 243(D) provides for the reservation of Scheduled Castes and Scheduled Tribes in Panchayats [CGPSC (Pre) 2014].
• Village Panchayats Organization: Article 40 directs State Governments to organize Village Panchayats [UPPSC (Pre) 2014, BPSC (Pre) 2017].
• Chief Administrative Officer: The Block Development Officer serves as the Chief Administrative Officer and Secretary of the Panchayat Samiti [MPPSC (Pre) 2011].

Municipalities 

• First Municipal Corporation: Madras was the first state to establish a Municipal Corporation in India [IAS (Pre) 2009].
• 74th Constitutional Amendment: It is related to Urban local bodies [Punjab PSC (Pre) 2010].
• Municipalities’ Powers: Article 243(W) deals with the power, authority, and responsibilities of Municipalities [MPPSC (Pre) 2007].
• Metropolitan Planning: A Metropolitan Planning committee prepares draft development plans for Metropolitan areas [UPPSC (Pre) 2011, MPSC (Pre) 2021, CGPSC (Pre) 2002].
• District Planning Committee Link: The District Planning Committee is the link between the 73rd and 74th Constitutional Amendments [MPPSC (Pre) 200].
• Second Administrative Reforms Commission: The second Administrative Reforms Commission subtitled its report on Local Government as “An inspiring Journey into the future” [MPPSC (Pre) 2015].
• Cooperative Society Directors: Article 243(ZJ) specifies that the maximum number of directors of a cooperative society may be 21 [UPPSC (Pre) 2016].

UPSC NCERT Practice Questions

1. Which one of the following statements regarding Panchayati Raj is not correct? UPPSC (Mains) 2012

(a) Panchayati system has been an integral part of India’s village life through the ages.

(b) 73rd Amendment came into effect on 15th August, 1993.

(c) It is a three-tier organically linked structure.

(d) Article 243(G) of the Indian Constitution adds to its importance.

2. Below are two statements, one is labelled Assertion (A) and the other as Reason (R). UPPSC (Pre) 2022

Assertion (A) The 73rd Amendment of the Constitution is considered to be a watershed in the history of local self-government in India.

Reason (R) The 73rd Constitution Amendment conferred the much coveted Constitutional status on Panchayats.

Codes

(a) Both A and R are true and R is the correct explanation of A.

(b) A is true, but R is false.

(c) Both A and R are true, but R is not the correct explanation of A.

(d) A is false, but R is true.

3. Match List I with List II and select the correct answer using the codes given below the lists. UPPSC (Pre) 2022

List I (Committees)	List II (Year of Appointments)
A. Balwant Rai Mehta Committee	1. 1957
B. Ashok Mehta Committee	2. 1977
C. LM Singhvi Committee	3. 1986
D. PK Thungun Committee	4. 1988

Codes

(a) 3 4 2 1

(b) 1 2 3 4

(c) 2 3 1 4

(d) 4 1 2 3

4. Which is not correct about Gram Sabha? CGPSC (Pre) 2015

1. One-tenth Quorum is essential for the meeting of Gram Sabha.

2. The presence of one-tenth of women is essential for the meeting of Gram Sabha.

3. Sarpanch and Panchs are responsible for Quorum.

4. The meeting of Gram Sabha can be adjourned in the absence of the Quorum.

5. Quorum is essential in the adjourned meeting.

6. The budget can be passed in the adjourned meeting where a Quorum is not present.

7. The audit report can be passed in the adjourned meeting where a Quorum is not present.

8. Sarpanch can be dismissed if a Quorum is not present in five subsequent meetings of Gram Sabha.

Codes

(a) 1, 2 and 5

(c) 4, 7 and 8

(b) 3, 6 and 7

(d) 5, 6 and 7

(e) 6, 7 and 8

5. Concerning the recommendations of the Ashok Mehta Committee (1977) on Panchayati Raj, which of the following statement (s) is/are correct? UPPSC (Pre) 2023

1. The three tier system of Panchayti Raj should be replaced by the two tier system.

2. A block should be the first point for decentralisation under popular supervision below the state level.

Select the correct answer by using the codes given below.

(a) Both 1 and 2

(b) Only 1

(c) Neither 1 nor 2

(d) Only 2

6. Consider the following statements. IAS (Pre) 2016

1. The minimum age prescribed for any person to be a member of Panchayat is 25 years.

2. A Panchayat reconstruction after premature dissolution continues only for the remainder period.

Which of the statement (s) given above is/are correct?

(a) Only 1

(b) Only 2

(c) Both 1 and 2

(d) Neither 1 nor 2

7. Which of the following statements is not true regarding Gram Sabha. UPPSC (Pre) 2023

(a) It has the powers and functions at the village level, like State Legislature has at the state level.

(b) Its powers are determined by the Central Government.

(c) It is a Village Assembly consisting of all registered voters in the area of Panchayt.

(d) Both (a) and (c)

8. Consider the following sources of Revenue of the Panchayats.

1. Local Authority Grant by Financial Commission.

2. Assistance by Central Co-operative Banks.

3. Allocations for Centrally Sponsored Schemes.

4. Allocation from State Finance Commission.

5. NABARD

Select the correct answer by using the codes given below.

(a) 1 and 2

(b) 1, 2 and 4

(c) 1, 2, 3 and 4

(d) 1, 2, 4 and 5

9. In the areas covered under the Panchayat (Extension to the Scheduled Areas) Act, 1996, what is the role/power of Gram Sabha? IAS (Pre) 2012

1. Gram Sabha has the power to prevent alienation of land in the Scheduled Areas.

2. Gram Sabha has the ownership of minor forest produce.

3. Recommendation of Gram Sabha is required for granting prospecting licence or mining lease for any mineral in the Scheduled Areas.

Which of the statements) given above is/are correct?

(a) Only 1

(b) 1 and 2 

(c) 2 and 3

(d) All of these

10. The Government enacted the Panchayat Extension to Scheduled Area (PESA) Act in 1996. Which one of the following is not identified as its objective? IAS (Pre) 2013

(a) To provide self-governance.

(b) To recognise traditional rights.

(c) To create autonomous regions in tribal areas.

(d) To free tribal people from exploitation.

11. In India, the first Municipal Corporation was set up in which one among the following? IAS (Pre) 2009

(a) Calcutta

(b) Madras

(c) Bombay

(d) Delhi

12. Which of the following are the objectives of 74th Constitutional Amendment? MPSC (Pre) 2013

1. To strengthen the democracy and democratic decentralisation.

2. To increase the participation of Civil society.

3. To include the subject of urban local government into the concurrent list.

4. To bring local governments under the control of State Government.

5. To empower them economically and make them self reliant.

Codes

(a) 1, 2 and 3

(b) 1, 3 and 4

(c) 1, 2 and 5

(d) 1, 2, 4 and 5

13. Consider the following provisions with respect to the 74th Amendment Act, 1992? MPPSC (Pre) 2016

1. Legal status to the Municipalities

2. Ward Committees

3. District Planning Committees

4. Direct Election of Chairperson of a Municipality Which of the above provision (s) is/are correct?

(a) Only 1

(b) 2 and 3

(c) 1, 2 and 3

(d) 2, 3 and 4

14. The Chairman of a Municipalty in Uttar Pradesh, is elected UPPSC (Pre) 2010

1. by all the adults living in the respective municipal

2. by all the voters included in the electoral list of the respective municipal area.

3. by the elected members of the municipality.

4. from among the electors of wards of the respective municipal area.

Select the correct answer by using the codes given below.

(a) Only 1 

(b) Only 2

 (c) 2 and 4 

(d) 3 and 4

15. What is the qualification to contest the election of the Municipal Council? CGPSC (Pre) 2016

1. For the office of the President, the age should not be less than 25 years.

2. For the office of the Councellor, the age should not be less than 21 years.

3. Whose name is in the voter list, can contest the election.

4. A person can contest the election of Councellor from two wards simultaneously.

5. A person can contest the election of President and Councellor simultaneously.

Codes

(a) 1, 2 and 3

(c) 2, 4 and 5

(b) Only 2

(d) 3, 4 and 5

(e) None of these

16. All elections to the Panchayats are conducted by UPPSC (Pre) 2023

(a) Election Commission of India

(b) Panchayati Raj Commission

(C) State Election Commission

(d) State Legislature

17. Which of the following statements regarding the functions of the Finance Commission constituted under Article 243 (1) of the Constitution is not correct? MPSC (Pre) 2015

1. Shall also review the financial position of the municipalities and make recommendations to the Finance Minister of a State.

2. The distribution between the state and the municipalities of the net proceeds.

3. The determination of the taxes duties, tolls and f which may be assigned to, or appropriated by the municipalities.

4. The grants in aid to the municipalities from the Consolidated Fund of the State.

Codes

(a) 2 and 3 

(b) 1 and 2 

(c) Only 4

 (d) Only 1

Know Right Answer

1.(b)

2.(a)

3.(b)

4.(d)

5.(b)

6.(b)

7.(b)

8.(c)

9.(d)

10.(c)

11.(b)

12.(c)

13.(d)

14.(c)

15.(d)

16.(c)

17. (d)

Frequently Asked Questions (FAQs)

FAQ 1: What is the significance of local government in India, particularly Panchayats and Municipalities, according to UPSC NCERT Notes on Indian Polity?

Answer: Local government plays a crucial role in the democratic fabric of India, promoting grassroots governance and ensuring participatory decision-making. Panchayats and Municipalities, as highlighted in UPSC NCERT Notes, serve as the foundation of decentralized administration. They empower citizens at the local level, fostering development tailored to the unique needs of each region. Panchayats focus on rural areas, while Municipalities cater to urban needs. The significance lies in promoting local self-governance, effective service delivery, and bridging the gap between the government and the people.

FAQ 2: What are the key features of Panchayati Raj institutions as outlined in UPSC NCERT Notes on Indian Polity?

Answer: According to UPSC NCERT Notes, the key features of Panchayati Raj institutions include:

1. Three-Tier Structure: Panchayati Raj comprises three levels – Gram Panchayat at the village level, Panchayat Samiti at the block level, and Zila Parishad at the district level. This tiered structure ensures a systematic approach to local governance.
2. Direct Elections: Members of Panchayats are elected through direct elections at the grassroots level. This democratic process enhances local representation and accountability.
3. Reservation for Marginalized Groups: The Panchayati Raj system promotes social justice by reserving seats for Scheduled Castes (SCs), Scheduled Tribes (STs), and women. This ensures their active participation in the decision-making process.
4. Decentralized Planning: Panchayats have the authority to prepare plans for economic development and social justice, ensuring that local needs are addressed in the planning process.

These features collectively contribute to the effectiveness of Panchayati Raj institutions in promoting local governance.

FAQ 3: How do Municipalities contribute to urban governance in India, based on UPSC NCERT Notes on Indian Polity?

Answer: As per UPSC NCERT Notes, Municipalities play a pivotal role in urban governance in India. Key points include:

1. Urban Local Bodies (ULBs): Municipalities, categorized as ULBs, cater to the needs of urban areas. They are responsible for local administration, public services, and infrastructure development in cities and towns.
2. Ward Committees: Municipalities often have ward committees representing specific geographical areas within the urban setup. These committees facilitate citizen participation in local governance and decision-making.
3. Municipal Corporation: Larger urban areas are governed by Municipal Corporations, which have greater administrative powers. They handle issues like town planning, public health, and sanitation.
4. Revenue Generation: Municipalities have the authority to generate revenue through property taxes, user charges, and other means. This financial autonomy enables them to fund local development projects.

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