The municipal bodies of India are vested with a long list of functions delegated to them by the state governments under the municipal legislation. These functions broadly relate to public health, welfare, regulatory functions, public safety, public infrastructure works, and development activities.
Public health includes water supply, sewerage and sanitation, eradication of communicable diseases etc.; welfare includes public facilities such as education, recreation, etc.; regulatory functions related to prescribing and enforcing building regulations, encroachments on public land, birth registration and death certificate, etc.; public safety includes fire protection, street lighting, etc.; public works measures such as construction and maintenance of inner city roads, etc.; and development functions related to town planning and development of commercial markets. In addition to the legally assigned functions, the sectoral departments of the state government often assign unilaterally, and on an agency basis, various functions such as family planning, nutrition and slum improvement, disease and epidemic control, etc.
The Twelfth Schedule of Constitution (Article 243 w) provides an illustrative list of eighteen functions, that may be entrusted to the municipalities.
Besides the traditional core functions of municipalities, it also includes development functions like planning for economic development and social justice, urban poverty alleviation programs and promotion of cultural, educational and aesthetic aspects. However, conformity legislation enacted by the state governments indicate wide variations in this regard.
In terms of fiscal federalism, functions whose benefits largely confine to municipal jurisdictions and may be termed as the essentially municipal functions. Similarly, functions that involve substantial economics of scale or are of national interest may not be assigned to small local bodies. For valid reasons, certain functions of higher authorities are appropriate to be entrusted with the Municipalities – as if under principal-agent contracts and may be called agency functions that need to be financed by intergovernmental revenues. Thus instead of continuing the traditional distinction between obligatory and discretionary functions the municipal responsibilities may be grouped into essentially municipal, joint and agency functions.