73rd Amendment Act, 1992

The Constitution (73rd Amendment) Act, 1992 mandates provisions for: -

• Establishment of a three-tier structure (Village Panchayat, Panchayat Samiti or
intermediate level Panchayat and Zilla Parishad or district level Panchayat).
• To provide 3-tier system of Panchayati Raj for all States having population of over 20 lakh.
• Establishment of Gram Sabhas at the village level.
• Regular elections to Panchayats every 5 years.
• Proportionate seat reservation for Scheduled Castes and Scheduled Tribes.
• Reservation of not less than 33% seats for women.
• Constitution of State Finance Commissions to make recommendations regarding the
financial powers of the Panchayats.
• Constitution of District Planning Committee to prepare draft development plan for the
district as a whole.

Powers and Responsibilities

The Constitution (73rd Amendment) Act, 1992 vests power in the State Government to endow
Panchayats with such powers and authority as may be necessary to enable them to function as
institutions of self-government such as: -
• Preparation of plants and their execution for economic development and social justice in
relation to 29 subjects listed in the XI Schedule of the Constitution.
• Authority to Panchayat to levy, collect and appropriate taxes, duties, tolls and fees.
• Transfer of taxes, duties, tolls and fees collected by the States to Panchayats.

Gram Sabha
In the Panchayati Raj set up, the Gram Sabha, the general assembly of villagers, has a key role for
effective functioning of Panchayats. In the Gram Sabha meeting, the rural poor, the women and
the marginalised people would now get an opportunity to join in decision making on matters
affecting their lives. Active functioning of the Gram Sabha would ensure a participatory
democracy with transparency, accountability and achievement.
• Gram Sabha should meet a least in each quarter preferably on Republic Day, Labour Day,
Independence Day and Gandhi Jayanti.
 • Decide developmental work to be undertaken by Panchayats based on needs assessment.
• Suggest remedial measures for economy and efficiency in the functioning of the
Panchayats.
• Question and scrutinise the decisions of Panchayats in the meeting of Gram Sabha.
• Discuss the Annual Financial Statement of Gram Panchayats.

The Constitution (73rd Amendment) Act, 1992 envisages empowered Panchayats as institutions of
self-government at the village level capable of :
• Planning and executing village level public works and their maintenance.
• Ensuring welfare of the people at the village level including health, education, communal
harmony, social justice particularly gender and caste based discrimination, dispute resolution,
welfare of children, especially the girl child.

The Constitution (73rd Amendment) Act, 1992 also envisages empowered Gram Sabhas as the
Parliament of the People at the grassroots level to whom the Gram Panchayats are solely
accountable.

The Provisions of the Panchayats (Extension to the Scheduled Areas ) Act, 1996
This Act extends Panchayats to the tribal areas of eight States, namely Andhra Pradesh, Bihar,
Gujarat, Himachal Pradesh, Maharashtra, Madhya Pradesh, Orissa and Rajasthan. This has come
into force on 24th December, 1996. Except Rajasthan and Bihar all States have passed laws to give
effect to the provisions contained in the Act, 40 of 1996.
Under the Act, Gram Sabha has been vested with powers for :-
• Ownership of Minor Forest Produce
• Development plans approval
• Selection of beneficiaries under various programmes
• Consultation on land acquisition
• Manage minor water bodies
• Control mineral leases
• Regulate/Prohibit sale of intoxicants
• Prevent alienation of land and restore unlawfully alienated land of STs
• Manage village markets
• Control money lending to STs
• Control institutions and functionaries in all social sector.

Training and awareness generation programme

The Ministry of Rural Development extends limited financial assistance to the States in their effort
to train and create awareness among the elected members of Panchayats and functionaries. The
State Governments are being asked to conduct such training courses. The Ministry has also been
providing financial assistance through the Council for Advancement of People’s Action & Rural
Technology (CAPART) to the non-governmental organizations for conducting training and
awareness generation programmes on Panchayati Raj. This Ministry also commissions research
and evaluation studies related to Panchayati Raj from voluntary organizations /institutions.
74th Amendment Act,
This Act has added Part IX-A to the Constitution of India. It is entitled as “The Municipalities’
and consists of provisions from articles 243-P to 243-ZG. In addition, the Act has also added
Twelfth Schedule to the Constitution. It contains 18 functional items of municipalities and deals
with Article 243-W.
The Act gave constitutional status to the municipalities. It has brought them under the purview of
justiciable part of the constitution.
In other words, state governments are under constitutional obligation to adopt the new system of
municipalities in accordance with the provisions of the Act.
The Act aims at revitalizing and strengthening the urban governments so that they function
effectively as units of local government. The salient features of the Act are:
1. Three Types of Municipalities:
The Act provides for the constitution of the following three types of municipalities in every state.
(a) A Nagar Panchayat (by whatever name called) for a transitional area, that is, an area in
transition from a rural area to an urban area.
(b) A Municipality for a smaller urban area.
(c) A Municipal Corporation for a larger urban area

2. Composition:
All the members of a municipality shall be elected directly by the people of the municipal area.
For this purpose, each municipal area shall be divided in territorial constituencies to be known as
wards.
3. Wards Committees:
There shall be constituted a wards committee, consisting of one or more wards, within the
territorial area of a municipality having population of three lakhs or more.

4. Reservation of Seats:
The Act provides for the reservation of seats for the scheduled castes and the scheduled tribes in
every municipality in proportion of their population to the total population in the municipal area.
Further, it provides for the reservation of not less than one-third of the total number of seats for
women (including the number of seats reserved for women belonging to the SCs and the STs).
5. Duration of Municipalities:
The Act provides for a five-year term of office for every municipality. However, it can be dissolved
before the completion of its term.
Further, the fresh election to constitute a municipality shall be completed
(i) before the expiry of its duration, of five years; or
(ii) in case of dissolution, before the expiry of a period of six months from the date of its
dissolution.
6. Disqualifications:
A person shall be disqualified for being chosen as or for being a member of a municipality if he is
so disqualified
(i) under any law for the time being in force for the purposes of elections to the legislature of the
state concerned; or (ii) under any law made by the state legislature.
However, no person shall be disqualified on the ground that he is less than 25 years of age if he
has attained the age of 21 years.
7. State Election Commission:
The superintendence, direction and control of the preparation of electoral rolls and the conduct of
all elections of the municipalities shall be vested in the State Election Commission.
8. Powers and Functions:
The state legislature may endow the municipalities with such powers and authority as may be
necessary to enable them to function as institutions of self- government.
9. Finances:
The state legislature may (i) authorize a municipality to levy, collect and appropriate taxes, duties,
tolls and fees; (ii) assign to a municipality taxes, duties, tolls and fees levied and collected by state
government; (iii) provide for making grants-in-aid to the municipalities from the Consolidated
Found of the state; and (iv) provide for constitution of funds for crediting all moneys of the
municipalities.
10. Finance Commission:
The Finance commission (which is constituted for the Panchayats) shall also, for every five years,
review the financial position of municipalities and make recommendation to the Governor as to:
(i) The principles which should govern:
(a) The distribution between the state and the municipalities, the net proceeds of the taxes, duties,
tolls and fee levied by the state.
(b) The determination of the taxes, duties, tolls and fees which may be assigned to the
municipalities.
(c) The grants-in-aid to municipalities from the Consolidated Fund of the state.
(ii) The measures needed to improve the financial position of the municipalities.
(iii) Any other matter referred to the Finance Commission by the Governor in the interests of sound
finance of municipalities.
11. Audit of Accounts:
The state legislature may make provisions with respect to the maintenance of accounts by
municipalities and the auditing of such accounts.
12. Areas Kept Out:
The Act does not apply to the scheduled areas and tribal areas referred in Article 244 of the Indian
Constitution. It shall also not affect the functions and powers of the Darjeeling Gorkha Hill Council
of the West Bengal.
13. District Planning Committee:
Every state shall constitute at the district level, a District Planning Committee to consolidate the
plans prepared by Panchayats and municipalities in the district, and to prepare a draft development
plan for the district as a whole.
14. Metropolitan Planning Committee:
Every metropolitan area shall have a Metropolitan Planning Committee to prepare a draft
development plan. Metropolitan area means an area having a population of 10 lakhs or more,
comprised in one or more districts and consisting of two or more municipalities or Panchayats or
other contiguous areas. The state legislature may make provisions with respect to:
(i) The composition of such committees;
(ii) The manner of election of members to such committees;
(iii) The representation in such committees of the Central Government, state government and other
organisations;
(iv) The functions of such committees in relation to planning and coordination for the metropolitan
area;
(v) The manner of election of chair persons of such committees.
15. Continuance of Existing Laws and Municipalities:
All the state laws relating to municipalities shall continue to be in force until the expiry of one year
from the commencement of this Act.
In other words, the states have to adopt the new system of municipalities based on this Act within
the maximum period of one year from 1st June 1993, which is the date of commencement of this
Act.