Evaluating the Implementation of the 74th Constitutional Amendment

Three decades after the 74th Constitutional Amendment gave urban local bodies (ULBs) a formal seat at the democratic table, the scorecard remains uncomfortably mixed. On paper, every state has conformed its laws to the amendment. In practice, cities continue to struggle for money, authority, and the simple power to make decisions about their own streets, water, and waste. An honest appraisal of the amendment requires us to separate legal success from operational reality – and that is exactly where the story gets interesting.

What the amendment promised 🔗

The 74th Constitutional Amendment Act, which came into effect on 1 June 1993, inserted Part IX-A (Articles 243P to 243ZG) and the Twelfth Schedule into the Constitution. Its core promise was straightforward: transform municipalities from creatures of state goodwill into constitutionally recognised institutions of self-government. The amendment mandated three tiers of ULBs – Nagar Panchayats for transitional areas, Municipal Councils for smaller urban areas, and Municipal Corporations for larger ones.

Beyond recognition, the amendment laid out a substantive package: regular five-year elections conducted by independent State Election Commissions, reservation of one-third of seats for women and proportional reservation for Scheduled Castes and Scheduled Tribes, a Twelfth Schedule listing 18 functional areas that could be devolved, and a State Finance Commission to review municipal finances every five years. Ward Committees were mandated for municipalities with populations above three lakh, and Metropolitan Planning Committees were envisaged for areas crossing ten lakh in population.

The legal framework is in place – but is the spirit? 🔗

Every state has passed conformity legislation. Elections to municipalities happen with reasonable regularity. Women’s reservation has dramatically altered the demographic profile of councils. State Election Commissions are functional. By these narrow metrics, the amendment has succeeded. However, a closer reading of the statistics reveals a more complex picture. According to a Janaagraha study cited by The Secretariat, only about 40% of Indian states have notified and partially implemented the amendment, with significant gaps remaining in devolving taxes, running functional ward committees, constituting MPCs, and establishing effective finance commissions.

In 2018, a NITI Aayog assessment reported that even after 25 years, only 11 states had meaningfully devolved municipal functions to ULBs. Kerala and West Bengal stand out for relatively substantive implementation, while most other states have adopted a minimalist approach.

The ‘may’ versus ‘shall’ problem 🔗

Much of the gap between intent and outcome traces back to a single linguistic choice. Article 243W empowers state legislatures to assign municipalities responsibilities for economic development and social justice, while Article 243X authorises state legislatures to permit municipalities to levy taxes, duties, tolls, and fees. The operative word in both provisions is “may,” not “shall.” This single verb choice converted what could have been a firm constitutional directive into a polite suggestion, leaving state governments with enormous discretion to decide how much – or how little – to actually devolve.

The consequence is that most states have transferred functions on paper without matching them with budgets, staff, or real decision-making authority. A municipal corporation might officially be responsible for urban planning or water supply, yet the actual work is handled by parastatal agencies reporting directly to the state government.

The execution gap in critical institutions 🔗

The amendment’s most forward-looking provisions – those dealing with citizen participation and metropolitan coordination – have seen the weakest implementation.

Ward Committees: participation on paper 🔗

Ward Committees were designed to be the connective tissue between citizens and their municipal governments, bringing decision-making closer to the neighbourhood level. Reality has been different. Across most cities, ward committees either do not exist, exist only formally without meaningful activity, or have been captured by local elites. Research on suburban Kolkata areas like Dankuni, published via academic studies on citizen participation, has documented that ward committees often fail due to citizen unawareness, poor information dissemination, and informal practices that exclude ordinary residents from decision-making.

Metropolitan Planning Committees: the missing institution 🔗

If Ward Committees have faltered, Metropolitan Planning Committees (MPCs) have barely gotten started. Article 243ZE requires every metropolitan area with over 10 lakh residents to constitute an MPC for preparing integrated development plans. The first and relatively more successful MPC was constituted in Kolkata in 2001, with sectoral committees eventually addressing infrastructure, transport, health, and environment. Elsewhere, the record is dismal. Mumbai’s MPC, set up under a 1999 Act, never moved meaningfully beyond grievance redressal, and in Bengaluru the MPC functions largely as a token body under the chief minister.

The failure of MPCs is not just a bureaucratic lapse; it is a constitutional violation with real consequences. Problems like transport corridors, watersheds, waste management, and air quality do not respect municipal boundaries. Without a functional metropolitan body, each municipality ends up planning in isolation while state-level parastatals fill the coordination vacuum – which is exactly what the amendment tried to prevent.

The fiscal squeeze on cities 🔗

Fiscal autonomy is where the amendment’s promise runs into the starkest reality. Indian cities generate a disproportionate share of national GDP but control a tiny share of public finance. Academic critiques have described the constitutional architecture under Articles 243H, 243I, 243X and 243Y as creating a system of “dependent fiscal federalism” – hierarchical, conditional and discretionary in ways that systematically undermine the financial autonomy of local bodies.

State Finance Commissions (SFCs) were meant to correct this imbalance by recommending, every five years, how resources should flow from states to municipalities. In practice, several states have delayed constituting SFCs, ignored their reports, or accepted recommendations selectively. Property tax collection remains weak, user charges rarely cover service costs, and borrowing powers are tightly restricted. The result: ULBs remain heavily dependent on discretionary state grants and centrally sponsored schemes, which come tied to conditions that further narrow local autonomy.

The problem of overlapping jurisdictions 🔗

In most Indian cities, critical urban services are delivered not by the municipality but by specialised state agencies. Water supply in Delhi rests with the Delhi Jal Board; in Bengaluru, it lies with the Bangalore Water Supply and Sewerage Board rather than the Bruhat Bengaluru Mahanagara Palike. Urban development authorities handle large-scale planning. Transport corporations run buses. Housing boards build and manage public housing. Each of these parastatals reports to the state government, not the elected municipality, producing a fragmented governance landscape where accountability is diffused and coordination is expensive.

Performance audits and accountability gaps 🔗

The Comptroller and Auditor General has conducted performance audits of the amendment’s implementation in several states, examining whether state governments have created robust institutional frameworks and actually transferred functions, funds, and functionaries. These audits consistently surface the same pattern: selective transfer of functions, underfunded mandates, weak capacity within ULBs, and limited follow-through on SFC recommendations.

Capacity constraints within municipalities themselves compound the problem. Many smaller ULBs lack qualified engineers, planners, accountants, and IT staff. Revenue collection efficiency is often poor. Administrative systems are outdated, and digital infrastructure remains thin in all but a handful of larger corporations. Even if a state were willing to devolve fully tomorrow, many municipalities would struggle to absorb the responsibility without significant institutional strengthening.

Recommendations for strengthening implementation 🔗

A serious appraisal must point toward solutions, not just deficiencies. Several reforms would meaningfully shift the trajectory of urban local governance.

Reassessing the state’s role 🔗

States need to move from being gatekeepers of municipal power to enablers of local governance. This means shifting parastatals and line departments away from direct service delivery and toward regulatory, technical, and support roles. Activity mapping – a clear, written delineation of which level of government does what within each of the 18 functional areas in the Twelfth Schedule – should be made mandatory rather than left to administrative discretion.

Genuine fiscal autonomy 🔗

Strengthening fiscal autonomy requires several parallel moves: expanding the revenue sources available to ULBs, granting them real flexibility to determine tax rates within reasonable bounds, ensuring that State Finance Commission reports are tabled and acted upon within statutory timelines, and moving toward formula-based, predictable inter-governmental transfers rather than discretionary grants. The word “may” in Articles 243W and 243X has often been flagged for replacement with “shall” to make devolution enforceable rather than optional.

Involving ULBs in planning 🔗

Planning for a city without involving the city’s elected government is a contradiction that the amendment tried to resolve but failed to enforce. Urban development authorities and planning boards should have statutory municipal representation. MPCs must be constituted in all metropolitan areas, meet regularly, and produce development plans that carry legal weight. Ward Committees need clearer powers, dedicated budgets, and genuine citizen representation rather than elite capture.

Capacity building and collaboration 🔗

Finally, the relationship between elected councillors and state-level officials needs deliberate reconstruction. Training programmes for new councillors, shared administrative cadres that serve both state and local governments, transparent data sharing, and regular structured dialogue between mayors and chief ministers can transform an adversarial dynamic into a collaborative one. Capacity building within ULBs – in financial management, project planning, digital administration, and citizen engagement – must be treated as a continuous investment, not a one-off training exercise.

The bigger picture 🔗

The 74th Amendment was never meant to finish the work of urban decentralisation; it was meant to start it. Three decades on, that start has not been consolidated into a settled practice. Cities in India still operate in a twilight zone where they have constitutional recognition but limited constitutional power, elected representatives but constrained authority, statutory functions but inadequate resources. The amendment’s architects trusted that political commitment to decentralisation would catch up with legal reform. That commitment, in most states, has not yet arrived at the scale required.

This is not a story of constitutional failure so much as a story of incomplete political will. The framework is sound; the execution has lagged. And in the gap between the two lives much of what frustrates residents of Indian cities today – flooded streets that no one owns, housing policies without local buy-in, waste management that fails every monsoon, and planning decisions taken by people with no accountability to the neighbourhoods they affect.

What do you think? If you had to pick just one reform – stronger Ward Committees, functional Metropolitan Planning Committees, or genuine fiscal autonomy – which would transform your city the most, and why has it proven so hard to implement even after three decades?

References

1. https://secforuts.mha.gov.in/74th-amendment-and-municipalities-in-india/
2. https://www.constitutionofindia.net/parts/part-ixa/
3. https://thesecretariat.in/article/lack-of-intent-not-policy-to-blame-for-india-s-urbanisation-mess
4. https://prepp.in/news/e-492-74th-constitutional-amendment-act-indian-polity-upsc-notes
5. https://www.apnilaw.com/upsc/indian-constitution/municipalities-in-india-articles-243p-243zg-explained/
6. https://vajiramandravi.com/current-affairs/part-9a-of-indian-constitution/
7. https://www.researchgate.net/figure/Structure-of-an-independent-Metropolitan-Planning-Committee-prescribed-in-the-74th-CAA_fig4_342681239
8. https://www.civilsocietyonline.com/column/city-life/urban-governance-is-a-failure/
9. https://lex-localis.org/index.php/LexLocalis/article/view/801257
10. https://cag.gov.in/en/audit-report/details/110761