Local government institutions have been constituted as three types of institutions which function separately as municipal councils,
urban councils and pradesheeya sabhas established under Pradesheeya Sabha Act no. 15 of 1987. Area of authority of each institution,
number of members comprising and names by which they are identified are also established under the same. Accordingly every local
government institution becomes a body cooperate as well as a legal entity which has a perpetual succession and a common seal. Similarly
although they empowered to function independently within the legal limits.
Local government institutions are entitled to generate their own income and passes powers to utilize them. Local government institutions
also have the power to frame laws, powers to impose taxes and powers to take policy decisions including the adoption of the budget.
The Pradesheeya sabha established for each Pradesheeya sabha division shall be a local government institute within that area and public health,
common utility services and public roads as well as comfortable living, convenience and welfare of the public and safe guarding all amenities
and their promotion by regularizing all matters as well as control and administration will be incharge of this institution.