Constitution of Municipalities: three-tier local bodies and Governor-led area classifications defining municipal applicability. The provision requires States to constitute Nagar Panchayats, Municipal Councils and Municipal Corporations for transitional, smaller and larger urban areas respectively, while permitting the Governor by public notification to designate parts of urban areas as industrial townships exempt from municipal constitution; the Governor may specify area classifications based on population, density, revenue, employment in non agricultural activities, economic importance or other factors.