The Twelfth Schedule of the Constitution includes “urban poverty alleviation” as a municipal function. Which constitutional mechanism ensures funds flow to municipalities for such functions?

Although the Twelfth Schedule lists functions that may be entrusted to Municipalities, the Constitution does not guarantee them direct or independent financial powers. Municipal finances depend on State legislation, State Finance Commission recommendations, and grants under Articles 243Y and 280. This reflects the constitutional design of decentralization within State control, ensuring accountability and fiscal discipline. Courts have recognized that while Municipalities are constitutional bodies, their financial autonomy is mediated through State mechanisms, preserving cooperative federalism rather than fragmented governance.