Article 243X of the Constitution of India empowers State Legislatures to authorize Municipalities to levy, collect, and utilize taxes, duties, tolls, and fees. Hence, Article 243X is the correct provision.
This Article also allows State Governments to assign certain revenues—such as taxes and duties collected by the State—to Municipalities for strengthening their financial resources. Additionally, it provides for grants-in-aid from the State’s Consolidated Fund to support municipal functions.
Further, Article 243X requires the creation of dedicated Municipal Funds where all receipts are credited and from which expenditures are made.
In contrast, Article 243P only defines key terms used in Part IX-A, such as Municipality, District, and Metropolitan area, and does not deal with financial powers. Hence, it is not relevant here.
Similarly, Article 243U deals with the tenure of Municipalities, fixing it at five years unless dissolved earlier, and does not address financial authority.
Lastly, Article 243ZB concerns the application of Part IX-A to Union Territories, allowing modifications by the President, and is unrelated to municipal financial powers.
Important Questions from Local Government
- Which of the following statements about the Gram Sabha is correct?
- How are the one-third reserved seats for women distributed across different categories in local bodies?
- Which Article of the Indian Constitution was given practical effect through the 73rd Constitutional Amendment Act, 1992, leading to the establishment of the Panchayati Raj System in India?
- The Twelfth Schedule of the Indian Constitution defines how many new tasks in the functional domain of the Urban Local Bodies as of March 2025?
- Who among the following consolidates the plans prepared by the Panchayats and Municipalities in the district?
