The 74th amendment act brought stability and efficiency to the urban local self government. Following are its main provisions:
- Formation of three types of Municipalities namely; Municipal Corporation, Municipal Council and Nagar Panchayat.
- Adequate representation to Scheduled Castes, Scheduled Tribes, Other Backward Classes and Women.
- It also introduces schedule 12th in the Constitution, which lists 18 subjects that comes under the jurisdiction of municipalities.
- Greater financial and functional responsibilities to the municipalities.
- Constitution of State Finance Commission to review financial position of the municipalities and suggest measures to improve their financial condition.
- Regular and fair conduct of elections.
- Creation of Ward Committees, District Planning Committees, Metropolitan Planning Committees for the preparation of development plans.
All the above provisions aimed at making the municipal bodies an effective instrument of local administration. According to the 74th amendment several State governments amended their legislations to bring uniformity with the constitutional provisions. However the State governments are entrusted with the final decision making authority.