The Bihar cabinet on Wednesday (July 15, 2026) authorised the Gram Panchayats to impose and collect taxes that would enable panchayats to develop their own financial resources, thus reducing their dependence on the State government.
The cabinet, chaired by Chief Minister Samrat Choudhary, gave its nod to the draft “Gram Panchayat Taxes, Rates and Fees Rules, 2026”, Cabinet Secretariat Department’s Additional Chief Secretary (ACS) Arvind Kumar Chaudhary told reporters in Patna in a post-cabinet briefing.
No rules have yet been framed in light of the provisions of the Bihar Panchayat Raj Act, 2006 and therefore, it became necessary to identify taxes and fees that may be levied by Panchayats, prescribe their maximum limits, and establish a procedure for their imposition, determination of rates, and collection so that Panchayats can collect these taxes and fees effectively.
It was among 30 decisions that were taken at Wednesday’s (July 15, 2026) cabinet meeting.
As per the draft Rules, the Gram Panchayats can now impose holding tax on occupants of holdings within the Gram Panchayat area, fees on professions, trades, advertisements, hoardings and industries operating within the panchayat area, besides user charges for services provided by the Panchayat.
The move is expected to result in a significant increase in the Gram Panchayats’ Own Source Revenue (OSR), thereby strengthening their financial self-reliance.
In another important decision, the State cabinet also gave its nod to the Panchayati Raj Department’s another proposal for the constitution/delimitation of Gram Panchayat, Panchayat Samiti and Zila Parishad constituencies under the different provisions of the Bihar Panchayat Raj Act, 2006 (as amended) on the basis of the 2011 Census population figures, Mr. Chaudhary said.
He added that the decision has been taken with the objective of strengthening local self-governance, ensuring the effective implementation of development schemes, providing balanced representation in proportion to the population, and facilitating easier access to public services.
The constitution/delimitation of Gram Panchayat areas is expected to enhance administrative efficiency, strengthen local representation, and promote regional balance in the development of Gram Panchayat areas, he added.
In another decision, the cabinet also gave its administrative approval for three water supply projects worth ₹596.43 crore and a Sewerage Network and Sewage Treatment Plant (STP) worth ₹232.90 crore at Hajipur under centrally sponsored Atal Mission for Rejuvenation and Urban Transformation (AMRUT 2.0), ACS said adding that the STP at Hajipur will provide sewerage network connectivity to 1,049 households across 8 wards in the town.
The three water supply projects under AMRUT 2.0 included— ₹170.86 crore for Khagaria, ₹197.12 crore for Sitamarhi and ₹228.45 crore for Samastipur.
These projects are important in the direction of providing clean, safe, and regular drinking water to city residents along with strengthening urban infrastructure.
It also approved “The Bihar Minerals (Prevention of Illegal Mining, Transportation and Storage) (Second Amendment) Rules, 2026”. It will enable greater participation by bidders in the e-auction of stone mining blocks across the state, thereby helping to increase government revenue.
It also approved the extension of the implementation of selected schemes, through the Integrated Tharuhat Development Agency, West Champaran, Bettiah, from the financial year 2025-26 to 2030-31. It also approved expenditure of the budgeted funds allocated for these schemes, ACS said.
The implementation of the proposed schemes under the Tharuhat Development Area will promote the economic development of Scheduled Tribes (including the Tharu tribe) and contribute to the development of basic infrastructure in the Tharuhat region, Mr. Chaudhary said.
The cabinet also approved the proposal to increase the monthly honorarium of ex-servicemen-cum-warders appointed on a contractual basis in the prisons of the state of Bihar from ₹19,800 to ₹30,000, Mr. Chaudhary said.
It also approved the constitution of “Bihar State Ropeways Company Ltd” to provide easy, safe, secure, and modern transportation facilities to undertake religious tourism and visit other important spots of the State. This company will build a ropeway at other religious tourist sites of the State.
Published – July 16, 2026 08:38 am IST
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