Major reforms introduced by the 74th Constitutional Amendment Act:

1. The recommendations and suggestions of several commissions and committees appointed by the Central Government, from time to time, to improve the urban bodies resulted in the enactment of the Constitution (Seventy- fourth Amendment) Act, 1992.

2. The Amendment made statutory provisions for the establishment, empowerment and functioning of urban local self- governing institutions. The main provisions of this Act can be grouped under two categories - compulsory and voluntary. Some of the compulsory provisions which are binding on all states are:

(i) Constitution of nagar panchayats, municipal councils and municipal corporations in small, big and very big urban areas respectively.

(ii) Reservation of seats in urban local bodies for Scheduled Castes / Scheduled Tribes roughly in proportion to their population.

(iii) Reservation of seats for women up to one-third seats.

(iv) The State Election Commission, constituted in order to conduct elections in the panchayati raj bodies will also conduct elections to the urban local self-governing bodies.

(v) The State Finance Commission, constituted to deal with financial affairs of the panchayati raj bodies also looks into the financial affairs of the local urban self-governing bodies.

(vi) Tenure of urban local self-governing bodies is fixed at five years and in case of earlier dissolution fresh elections are held within six months.

Some of the voluntary provisions which are not binding, but are expected to be observed by the States are:

(i) Giving voting rights to members of the Union and State Legislatures in these bodies.

(ii) Providing reservation for backward classes.

(iii) Giving financial powers in relation to taxes, duties, tolls and fees, etc.

(iv) Making the municipal bodies autonomous and devolution of powers to these bodies to perform some or all of the functions enumerated in the Twelfth Schedule added to the Constitution through this act and/or to prepare plans for economic development.

In accordance with the 74th Amendment, municipal corporations and municipalities (municipal boards or municipal committees) are now regulated in a fairly uniform manner in all the States.