Union Territories don't have municipal governments like states do.

Article 243ZB ensures the same municipal governance framework (Part IX-A) applies to Union Territories, just with 'Administrator' replacing 'Governor' and the UT's own Assembly replacing a state Legislature where applicable.

The President's power to modify these rules for a Union Territory is unlimited and arbitrary.

The President's notification power under the proviso must still work within the framework of Part IX-A; it allows exceptions and modifications for specific circumstances, not a complete rewriting of the constitutional scheme.

The Constitution of India

Article 243ZB

Application to Union territories

The provisions of this Part shall apply to the Union territories and shall, in their application to a Union territory, have effect as if the references to the Governor of a State were references to the Administrator of the Union territory appointed under article 239 and references to the Legislature or the Legislative Assembly of a State were references in relation to a Union territory having a Legislative Assembly, to that Legislative Assembly:§

Provided that the President may, by public notification, direct that the provisions of this Part shall apply to any Union territory or part thereof subject to such exceptions and modifications as he may specify in the notification.§

Why this exists

Part IX-A (added by the 74th Constitutional Amendment in 1992) created a uniform framework for municipal governance—municipal corporations, councils, and nagar panchayats—across India. Union Territories don't have Governors or full state legislatures, so the Constitution needed a mechanism to adapt State-focused language ('Governor', 'Legislature') to fit UT administration. Article 243ZB does this by substituting UT-specific authorities and letting the President customize the rules through notification, since Union Territories vary widely in size, population, and governance structure (e.g., Delhi and Puducherry have Legislative Assemblies, while others like Lakshadweep do not).

Common misconceptions

Myth: Union Territories don't have municipal governments like states do.
Fact: Article 243ZB ensures the same municipal governance framework (Part IX-A) applies to Union Territories, just with 'Administrator' replacing 'Governor' and the UT's own Assembly replacing a state Legislature where applicable.
Myth: The President's power to modify these rules for a Union Territory is unlimited and arbitrary.
Fact: The President's notification power under the proviso must still work within the framework of Part IX-A; it allows exceptions and modifications for specific circumstances, not a complete rewriting of the constitutional scheme.