The history of urban local self-governing bodies (commonly called Municipalities) in Karnataka State dates back to more than a century. These local bodies are again classified into various categories like Corporations, Cities, Town Municipalities and Town Panchayats depending upon the population. The Municipal bodies are now governed by the provisions contained in Karnataka Municipalities Act, 1964 (for City Municipalities, Town Municipalities and Town Panchayats) and Corporation Act, 1976 (for Corporations). Municipalities have been constituted with the objective of discharging certain obligatory functions(As stated in Obligatory functions link)
The Government of Karnataka has reconstituted the municipalities according to the 74th Constitutional Amendment Act. The towns have now been classified based on the population and other criteria as Town Panchayat (Population 10,000 to 20,000), Town Municipal Councils (Population 20,000 to 50,000) City Municipal Councils (Population 50,000 to 3,00,000) and City Corporations (Population 3.0 lakhs and above). On this basis, at present there are 10 City Corporations, 41 City Municipal Councils, 68 Town Municipal Councils and 94 Town Panchayats in the state. Also for specified areas like industrial areas where municipal services are required to be provided, the government has created 5 Notified Area Committees (NAC).
In order to discharge the above responsibilities, Municipalities have been vested with the powers to levy certain taxes and fees. Also, the State Government transfers a portion of its general revenues to the urban local bodies. The main sources of income of the municipalities are derived from (a) taxes on building and lands, (b) user charge for water supply (c) license fee for regulating the building construction activities and fee from other trade license. The municipalities can also raise loans from Central and State Governments and Financial Institutions to meet expenditure under capital heads of accounts.
Government through Directorate of Municipal Administration supervises the functioning of the municipalities. Government directly supervises the functioning of the Corporations. The Directorate has the responsibility to supervise the function of the municipalities, work out suitable human resource policies, exercise disciplinary control over the staff of municipalities, monitor the tax collection of ULBs, lay down policies for transparency in expenditures, hear appeals against the decisions of municipalities, release the Government transfers to the ULBs, as well as implement schemes like SJSRY (for urban poverty alleviation), IDSMT, Nirmala Nagar. The Directorate also collects statistics from ULBs and helps in the preparation of municipal statistics. The Directorate also inspects municipalities, interacts with both elected representatives and the employees to find out both genuine and specific problems of urban administration and urban municipal services and work out the solutions for those problems.