Bihar Cabinet Grants Gram Panchayats Power to Levy Taxes for Self-Reliance
The Bihar cabinet, chaired by Chief Minister Samrat Choudhary, on Wednesday authorised Gram Panchayats to impose and collect taxes, enabling them to develop their own financial resources and reduce dependence on the state government.
The cabinet approved the draft 'Gram Panchayat Taxes, Rates and Fees Rules, 2026', as announced by Cabinet Secretariat Department's Additional Chief Secretary Arvind Kumar Chaudhary in Patna. The rules were necessitated by the absence of any framework under the Bihar Panchayat Raj Act, 2006, to identify and levy taxes and fees by Panchayats, set maximum limits, and establish procedures for imposition and collection.
Under the new rules, Gram Panchayats can levy holding tax on occupants of holdings within their area, fees on professions, trades, advertisements, hoardings, and industries, as well as user charges for services provided by the Panchayat. The move is expected to significantly boost the Panchayats' Own Source Revenue (OSR), strengthening their financial autonomy.
The cabinet also approved proposals for the delimitation of Gram Panchayat, Panchayat Samiti, and Zila Parishad constituencies based on the 2011 Census population figures, as per provisions of the Bihar Panchayat Raj Act, 2006 (as amended). This aims to strengthen local self-governance, ensure balanced representation proportional to population, and improve access to public services. The delimitation is expected to enhance administrative efficiency and promote regional development.
In other decisions, the cabinet gave administrative approval for three water supply projects under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT 2.0) worth ₹596.43 crore for Khagaria, Sitamarhi, and Samastipur, and a sewerage network and sewage treatment plant (STP) at Hajipur worth ₹232.90 crore, which will provide connectivity to 1,049 households across 8 wards.
The cabinet also approved 'The Bihar Minerals (Prevention of Illegal Mining, Transportation and Storage) (Second Amendment) Rules, 2026' to increase bidder participation in e-auctions of stone mining blocks, potentially boosting government revenue. Additionally, it extended the implementation of selected schemes through the Integrated Tharuhat Development Agency, West Champaran, Bettiah, from 2025-26 to 2030-31, and approved budgeted fund expenditure. These schemes aim to promote economic development of Scheduled Tribes, including the Tharu tribe, and develop basic infrastructure in the Tharuhat region. The cabinet also approved an increase in the monthly honorarium for ex-servicemen-cum-war widows.
