Administrative Functions and Sources of Income of Municipal Council


Administrative Functions of Municipal Council:

(i) Municipal Council frames its own bye-laws for running its administration.

(ii) It can impose fines on those who violate its rules.


(iii) It has the power to recruit and remove some categories of the employees of Municipal Council.

(iv) It can purchase and sell land.

(v) It can demolish dilapidated and dangerous buildings and bridges.

(vi) It can levy and collect taxes.


Sources of Income of the Municipal Council:

Main sources of the income:

1. Income from Taxes:

The main source of income of a Municipal Council is taxes, such as Property Tax, Octroi, Tax on Vehicles, Tax on Animals, Tax on advertisements. Toll tax, Profession Tax, Entertainment Tax, etc.


2. Income from Property, Electricity and Water Supply:

Municipal Council collects taxes from the people for the provision of water supply and electricity. Apart from this, the Municipal Council has income from its shops, inns, rest houses, janjghars etc.

3. Government Grants:

The Municipal Council receives regular and specific grants from the government which constitute also a major source of its income.


4. Loans:

The Municipal Council can raise loans from banks and other financial institutions with the prior approval of the government.

After 74th Amendment of the Constitution, the State governments have to set up Finance Commissions which can be given the responsibility:

(i) To determine principles of distributing income from various taxes imposed by a state between the state government and Municipal Councils,


(ii) To formulate principles relating to taxes to be assigned to Municipal Councils, and

(iii) To recommend proper action to the government for improving the financial positions of Municipal Councils.

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