- The State Government may, for the purpose of application of the provisions of this Act may classify any municipal area on the basis of the population as ascertained at the last preceding census of which the relevant figures have been published, as -(1)a larger urban area, namely, Municipal Corporation if the local body area is having population of one lakh and fifty thousands and above;(2)a smaller urban area, namely, Municipal Council if the local body area is having population of forty thousand and above and less than one lakh and fifty thousand;Provided a Municipal Council shall be classified asClass 'A' Municipal Council, if the local body area is having population of one lakh and above and less than one lakh and fifty thousand; andClass 'B' Municipal Council, if the local body area is having population forty thousand and above and less than one lakh; and(3)a transitional area, namely, Nagar Panchayat if the local body area is having population of twelve thousand and above and less than forty thousand.:Provided that for the purpose of classification of municipal areas in any hill area, pilgrim centre, tourist centre or mandi town, the Government may, by notification, determine separate size of population for each class of such municipal areas.Provided further that the Government may, having regard to the economic importance and such other factors in such local area, as it deem fit, and at its discretion, determine any local area irrespective of population specified in sub-section (3 ) constitute, by notification, a Nagar Panchayat.
