Nagar Panchayats are created for a transitional areas (the area which is fast changing from rural to urban area) or for a very small urban areas.
For this purpose several factors are taken into consideration; the density of the population therein, the revenue generated for local administration, the percentage of employment in non-agricultural activities, the economic importance of the area etc.
Composition of a Nagar Panchayat:
The strength of the members of Nagar-Panchayats is fixed by the government from time to time. They are directly elected by the people of the area on the basis of adult franchise. For the purpose of election, the areas of Nagar Panchayats are divided into wards and each ward elects one member.
Besides the elected members, the member of the State Legislative Assembly (M.L.A) representing that area is also the ex-officio member of Nagar Panchayat.
The tenure of Nagar Panchayat has been fixed at 5 years. It begins from the date of its first meeting. It is obligatory to hold its elections before the expiry of its 5 years term. If a Nagar Panchayat is dissolved before the expiry of its term, its re-election has to be held within six months of the dissolution. The new Nagar Panchayat in this case holds office for the remaining tenure of the dissolved Nagar Panchayat.
President and Vice-President:
Every Nagar Panchayat elects one President and one Vice-President. They are elected by all the elected members. The President presides over its meetings.
Reservation of Seats:
There is reservation of seats for:
(i) Scheduled Castes,
(ii) Backward Classes, and
The criteria for reservations are the same as for all other local government institutions. The Nagar Panchayat performs all the civic functions for its area. It formulates and implements plans for the development of the area.