Since in ancient Indian political and administration system the Municipal administration System took birth to regulate and govern the Local Administration of the cities, towns etc. Similarly, in Yavatmal District till 2009 – 2010 total 9 Municipalities are working as local bodies, which are performing the functions as social administrative bodies for regulating and providing the facilities to the society. While performing these functions, these municipalities are facing the hindrances for implementing the development plan, providing the facilities to the society and collecting the revenues. Due to these difficulties, the classified municipalities are lagging behind the required development of the locality. The required achievement could not be gained by the C class Municipalities than A and B class Municipalities. Of course, no doubt the backing of the funds is the backbone of every social development plan to be implemented by the Municipalities. Similarly, there are many other internal as well as external reasons to keep these Municipalities lagging behind. The classification of these Municipalities on the basis of population and development is being used to study the acuteness of the problem. There are differentiation being made as per the sources of the revenues of Municipalities at various levels whether internally as well as externally. For this purpose, the comparative economical study of these Municipalities shall cristalize the utility of funds and implementation of the financial plans in achievement of the developmental goals.