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The Constitution (One Hundred and Twenty-Fifth Amendment) Bill, 2019 was introduced in Rajya Sabha by the Minister of Home Affairs, Mr. Rajnath Singh on February 6, 2019. The Bill amends provisions related to the Finance Commission and the Sixth Schedule of the Constitution.  The Sixth Schedule relates to the administration of tribal areas in the states of Assam, Meghalaya, Tripura and Mizoram.  

Village and Municipal Councils: The Sixth Schedule states that tribal areas in certain regions of these four states will be ‘autonomous districts’, each consisting of a District Council.  Further, the Governor may divide an autonomous district into autonomous regions, each consisting of a Regional Council.  The administration of autonomous districts and regions will be carried out by District and Regional Councils, respectively. 

The Bill amends this to provide for Village and Municipal Councils in addition to the District and Regional Councils. Village Councils will be established for villages or groups of villages in rural areas, and Municipal Councils will be established in urban areas of each district.  Further, the District Councils may make laws on various issues, including: (i) number of Village and Municipal Councils to be formed, and their composition, (ii) delimitation of constituencies for election to the Village and Municipal Councils, (iii) powers and functions of Village and Municipal Councils.  

Further, the Bill states that the Governor may make rules for devolution of powers and responsibilities to the Village and Municipal Councils. Such rules may be framed in relation to: (i) preparation of plans for economic development, (ii) implementation of land reforms, (iii) urban and town planning, and (iv) regulation of land-use, among other functions. 
State Finance Commission: The Bill provides the appointment of a Finance Commission for these states, to review the financial position of District, Village, and Municipal Councils.  The Commission will make recommendations regarding: (i) distribution of taxes between states and District Councils, (ii) grants-in-aid to District, Village, and Municipal Councils from the Consolidated Fund of the state, (iii) and measures to improve the financial position of District, Village, and Municipal Councils. 

Finance Commission: Under the Constitution, the functions of the Finance Commission include making recommendations to the President on: (i) distribution of taxes between the Union and states, and the (ii) provision of grants-in-aid to states.  The Bill states that in addition to these functions, the Commission will make recommendations on measures to augment the Consolidated Fund of a state to provide resources to District Councils, Village Councils, and Municipal Councils in tribal areas in the four Sixth Schedule states.

Elections to councils: The Bill states that all elections to the District Councils, Regional Councils, Village Councils, and Municipal Councils will be conducted by the State Election Commission appointed by the Governor, for these four states.  

Disqualification of members of councils: The Sixth Schedule provides that the Governor may make rules for the constitution of District and Regional Councils, including qualifications for being elected as members of these councils.  The Bill adds that the Governor may make rules for the disqualification of such members on the grounds of defection.