The attack comes two days after Pakistan launched its latest national campaign to stamp out the virus
About 1,000 people are running. In at least 25 councils, candidates are running unopposed.
Most of the candidates and thousands of council members, the electorate for Thursday's vote, have lived for months in hotels in Srinagar, the region's main city, over security concerns.
Officials tout the councils, which will be responsible for allocating government funds, as grassroots democracy. But observers say the system lacks legitimacy in Kashmir.
Political scientist Dr. Noor Ahmed Baba said the exercise, at least in theory, is an "important layer of democracy" but questioned conducting it in "extremely difficult and abnormal times."
"When most people are bothered about their basic freedoms and livelihood, facing crushing restrictions, you've these elections," Baba said. "This is more like completing a formality. It looks more like an artificial exercise."
The council elections held last December were boycotted by separatist leaders and armed rebel groups who challenge India's sovereignty over Kashmir. Both rebels and separatists in the past have called elections in Kashmir an illegitimate exercise under military occupation.
About 60 per cent of the 21,208 village council seats in the Kashmir valley are vacant because no one ran for them. The winners of another 30% were elected unopposed.
Police chief Dilbagh Singh said authorities have made security arrangements for the Thursday's elections to be conducted smoothly.
Before downgrading Kashmir's status, New Delhi sent tens of thousands of additional troops to the regions, imposed a sweeping curfew, and cut virtually all communications.
Authorities have since eased some restrictions, lifting roadblocks and restoring landlines and some mobile phones.
The attack comes two days after Pakistan launched its latest national campaign to stamp out the virus
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