该法实施的第一个问题是识别和划定农村和城市地区。在古吉拉特邦州，西孟加拉、喀拉拉邦，约三分之二的城镇非市镇。[ 2 ]即使这些城镇在这些国家有这些城镇非农活动率较高，不应确认为城市和仍在城中村现状下，这是因为村政府可以批准为像农村发展项目的实施给予MNREGA NREGA等状态下，而另一方面，如果这些地区被列为引用美国无法制裁这样的发展活动的钱从政府和国家本身将负责这些新形成的城市提供进一步发展基础设施补助。这意味着当地机构失去了更好的资金来源。因此，由于既得利益者的政治结构，国家的障碍是在实施第七十四宪法修正案的行为。
The enactment of the 74th Constitutional Amendment Act marks a transformation in the role of urban local governing bodies in terms of the urban governing bodies being constitutionalised and substantial authorities being granted to them under the act regarding decision making to acquiring finance, but still certain questions remained unanswered.
The first issue in implementation of the act is the identification and demarcation rural and urban areas. In states like Gujarat, West Bengal, Kerala, approximately two third of towns are non-municipal towns. Even though these towns in these states have higher prevalence of non-agricultural activities these town are not recognised as cities and are still under the status of villages, this is because under the status of villages the state government can sanction grant for implementation of projects for rural development like MNREGA, NREGA etc. while on the other hand if these area are classified as cites the states would not be able to sanction money for such developmental activities from the government and the state itself will be responsible to provide grants for further infrastructure development in these newly formed cities. The implication of this is that the local bodies lose out on better sources of finance. Therefore due to the vested interest of the members of the political structure of the state barriers are created in the implementation of the 74th Constitutional Amendment Act.