Local governance

Explanation

All three pairs are correctly matched. Article 243K places the superintendence, direction, and control of the preparation of electoral rolls and the conduct of elections to Panchayati Raj institutions with the State Election Commission — a constitutional authority independent of the Election Commission of India. Article 243D mandates reservation of seats for Scheduled Castes and Scheduled Tribes in proportion to their population, and not less than one-third of total seats reserved for women, across all tiers of Panchayati Raj. The Supreme Court's 'triple test' — articulated in cases such as Vikas Kishanrao Gawali v. State of Maharashtra (2021) — lays down that before extending OBC reservation in local body elections, the state must (i) set up a dedicated backward classes commission, (ii) conduct a rigorous empirical inquiry into the nature and implications of backwardness at the local-body level, and (iii) ensure that the quantum of reservation does not exceed the constitutional ceiling when aggregated with SC/ST reservations. Failing any one limb renders the OBC reservation constitutionally infirm. The UP panchayat poll situation — where the state constituted a dedicated backward classes commission specifically to satisfy this triple test before finalising OBC seat reservations — directly illustrates all three pairs in action.

Explanation

Statement 1 is correct. The Twelfth Schedule (inserted by the 74th Amendment) enumerates 18 functions such as urban planning, regulation of land use, and public health. However, the amendment does not automatically vest these functions in municipalities — it empowers State legislatures to endow municipalities with powers and authority to perform these functions. The actual devolution remains at the discretion of each State government, which is why the depth of municipal autonomy varies widely across Indian States. Statement 2 is correct. Article 243-I of the Constitution, inserted by the 74th Amendment, mandates every State to constitute a State Finance Commission (SFC) at five-year intervals. The SFC is required to review the financial position of municipalities and make recommendations on the distribution of the net proceeds of taxes, duties, tolls, and fees between the State and its municipalities, as well as the grants-in-aid to municipalities. Statement 3 is incorrect. The 74th Constitutional Amendment contains no provision requiring municipal procurement to be routed through any specific e-procurement portal. The use of platforms such as the Government e-Marketplace (GeM) portal for municipal purchases is a policy and administrative requirement imposed by State governments or the Centre, not a constitutional mandate under the 74th Amendment. Conflating State-level administrative controls (which are the subject of current oversight reforms in Madhya Pradesh) with constitutional provisions is a common misconception this question is designed to test.

Explanation

Statement 1 is correct. The 74th Constitutional Amendment (1992) inserted the Twelfth Schedule, which enumerates 18 functions that State legislatures may entrust to municipalities. These include urban planning, regulation of land use and construction of buildings, and planning for economic and social development — all of which underpin municipal authority over building permits and occupancy certificates. Statement 2 is incorrect on the basis of a conceptual confusion about the CAG's legal source of authority. The CAG's audit mandate over local bodies is not derived from Article 149 (which broadly defines the CAG's duties as prescribed by Parliament) but from the Comptroller and Auditor General's (Duties, Powers and Conditions of Service) Act, 1971, specifically provisions governing audit of bodies/authorities receiving grants or loans from government funds. Article 149 is the constitutional enabling provision, but it confers duty-definition to Parliament — it does not itself grant the CAG power to audit grant-receiving bodies. Furthermore, the characterisation of 'substantially financed' bodies under Article 149 blurs the CAG's distinct audit streams (audit under the DPC Act versus audit under Article 149 read with Article 151). This conflation makes the statement, as framed, misleading and incorrect. Statement 3 is incorrect. Under municipal building law, a building cannot be lawfully occupied without an occupancy certificate — the certificate signifies that the building has been completed in accordance with the sanctioned plan and is deemed fit for use. The absence of an occupancy certificate for an operational building does constitute a regulatory violation; it is not merely a procedural gap separate from unauthorised-structure status. In fact, as the CAG's audit of Kerala's ULBs highlights, buildings operating without an occupancy certificate are treated as violating the Kerala Municipal Building Rules — making Statement 3's claim that absence of an OC 'does not by itself denote an unauthorised structure' substantively wrong in the context of municipal building law.

Explanation

Article 243G (inserted by the 73rd Constitutional Amendment, 1992) empowers State legislatures to endow Panchayats with powers and responsibilities for preparing plans for economic development and social justice — this is the foundational constitutional provision for Gram Panchayat Development Plans (GPDPs). Pair 1 is correctly matched. The Eleventh Schedule, also added by the 73rd Amendment, lists 29 functional subjects (including agriculture, land improvement, rural electrification, rural housing, etc.) that State legislatures may devolve to Panchayats; it does not itself mandate devolution but specifies the domain of possible devolution. Pair 2 is correctly matched. The eGramSwaraj portal is a digital governance tool under the Ministry of Panchayati Raj for preparing GPDPs, and its mandate flows from the Part IX / 73rd Amendment framework (Articles 243–243O and the Eleventh Schedule). The Twelfth Schedule of the Constitution pertains to the 18 functional domains of Urban Local Bodies (Municipalities) under the 74th Amendment — it has no bearing on gram panchayats. Pair 3 is therefore incorrectly matched.

Explanation

Statement 1 is incorrect. While the 73rd Amendment inserted the Eleventh Schedule listing 29 subjects, it does not make the transfer of these functions a mandatory, justiciable obligation. The Amendment uses enabling language — it empowers States to devolve functions to Panchayati Raj Institutions (PRIs), but the actual devolution is discretionary and depends on State legislation. No court can compel a State to transfer any particular function from the Eleventh Schedule to PRIs, because the provision is not in the nature of an enforceable right. This is a critical constitutional distinction: the 73rd Amendment created a framework for devolution, not a guarantee of it. Statement 2 is correct. The People's Plan Campaign, most prominently executed in Kerala, exemplifies the participatory planning vision embedded in the 73rd Amendment. It involves gram sabhas and local bodies in identifying vulnerable households, preparing individual micro-plans, and converging resources of multiple government departments at the local level — precisely the kind of bottom-up, community-led development the Amendment envisaged. Statement 3 is correct. Articles 243G and 243W of the Constitution empower panchayats and urban local bodies respectively to prepare plans for economic development and social justice. However, both articles are explicitly subject to State legislation — the Constitution does not by itself vest these functions in LSGIs; it merely authorises State legislatures to do so. The actual extent of decentralisation therefore varies significantly across States depending on what their legislatures have chosen to devolve, a persistent gap in India's federal architecture.

Explanation

Statement 1 is correct. The 74th Constitutional Amendment (Articles 243-I) requires each State to constitute a State Finance Commission (SFC) every five years. The SFC reviews the financial position of municipalities and recommends to the Governor the principles governing the distribution of net proceeds of taxes, duties, tolls, and fees between the State and ULBs, as well as grants-in-aid from the State's Consolidated Fund to municipalities. This mirrors the structure of the Central Finance Commission for Centre–State relations. Statement 2 is incorrect. Municipal bonds in India are not backed by any sovereign guarantee from the Union Government. They are credit-rated instruments issued by municipalities on the strength of their own revenue streams (such as property tax, user charges, and assigned revenues). The absence of a sovereign guarantee is precisely why ULB creditworthiness is critical — only municipalities with sound finances, transparent accounting, and adequate own-source revenue can achieve the investment-grade ratings necessary to access the capital market. The Securities and Exchange Board of India (SEBI) has issued regulations for municipal bonds, and several Indian cities (Pune, Hyderabad, Ahmedabad, Indore, etc.) have issued bonds based on their own creditworthiness, not on government guarantees. Statement 3 is correct. The 74th Amendment's Twelfth Schedule lists 18 functional subjects that may be transferred to municipalities, and Schedule XII of municipal laws typically empowers ULBs to levy property tax and other charges. However, in practice, own-source revenue (OSR) mobilisation remains severely constrained — most ULBs rely predominantly on devolution from State governments and central grants (such as those from the Finance Commission pool). Low OSR, combined with uneven financial reporting, renders the majority of ULBs non-creditworthy for market borrowing. This structural weakness is the central problem that programmes like the India Municipal Finance MPA (of which the Telangana Urban Transformation and Jobs Program is a part) aim to address.