In a landmark decision, the Bihar cabinet has approved the draft rules allowing Gram Panchayats to levy and collect local taxes, aiming to boost financial autonomy. The cabinet, led by Chief Minister Samrat Choudhary, also cleared key infrastructure, tourism, and administrative reforms.

Key Takeaways

  • The Bihar cabinet approved the draft 'Gram Panchayat Taxes, Rates and Fees Rules, 2026'.
  • Gram Panchayats are now authorized to levy holding tax, professional tax, and fees on advertisements and local industries.
  • Delimitation of Gram Panchayats, Panchayat Samitis, and Zila Parishads will be conducted based on the 2011 Census.
  • Over ₹829 crore sanctioned for water supply and sewerage projects under the AMRUT 2.0 scheme.
  • 'Bihar State Ropeways Company Ltd' to be established to boost religious tourism across the state.

In a historic move aimed at strengthening local self-governance and fostering rural development, the Bihar government has empowered Gram Panchayats to levy and collect local taxes. During a cabinet meeting chaired by Chief Minister Samrat Choudhary on Wednesday, a total of 30 crucial proposals were approved. The most defining reform among these is the decision to grant financial autonomy to local bodies, thereby reducing their long-standing dependence on state government funding and resources.

A Giant Leap Towards Financial Autonomy

Briefing reporters in Patna, Additional Chief Secretary (ACS) of the Cabinet Secretariat Department, Arvind Kumar Chaudhary, stated that the cabinet has given its nod to the draft 'Gram Panchayat Taxes, Rates and Fees Rules, 2026'. He explained that although the Bihar Panchayat Raj Act was enacted in 2006, specific rules regarding tax collection had not been framed till now. The newly approved rules will finally establish a clear procedure, prescribing maximum limits and guidelines for tax collection. Consequently, Gram Panchayats can now levy holding taxes on occupants, professional taxes on trades and industries, and fees on advertisements and hoardings, alongside user charges for civic services.

Delimitation and Administrative Reorganization

In another major administrative decision, the cabinet approved the Panchayati Raj Department’s proposal for the fresh constitution and delimitation of Gram Panchayat, Panchayat Samiti, and Zila Parishad constituencies. This process will be carried out based on the population figures of the 2011 Census. According to officials, this step is designed to ensure balanced representation in proportion to the population, enhance administrative efficiency, and facilitate easier public access to essential services, ultimately promoting regional equilibrium in development.

Massive Push for Urban Infrastructure and Tourism

Under the centrally sponsored Atal Mission for Rejuvenation and Urban Transformation (AMRUT 2.0), the cabinet sanctioned ₹232.90 crore for a state-of-the-art Sewerage Network and Sewage Treatment Plant (STP) in Hajipur. Additionally, three water supply projects worth ₹596.43 crore were approved for Khagaria, Sitamarhi, and Samastipur to ensure clean and regular drinking water. To tap into the state's immense tourism potential, the cabinet also approved the setting up of the 'Bihar State Ropeways Company Ltd'. This dedicated entity will construct modern ropeway systems at key religious and eco-tourism destinations across Bihar.

Welfare Schemes and Strategic Reforms

Demonstrating its commitment to tribal welfare, the cabinet extended the implementation of development schemes under the Integrated Tharuhat Development Agency in West Champaran from the financial year 2025-26 to 2030-31. This extension will drive infrastructural and economic growth for the Scheduled Tribes, including the Tharu community. Furthermore, the monthly honorarium of contractually appointed ex-servicemen-cum-warders in state prisons was hiked significantly from ₹19,800 to ₹30,000. To curb illegal mining and boost state revenue, the cabinet also approved the 'Bihar Minerals (Prevention of Illegal Mining, Transportation and Storage) (Second Amendment) Rules, 2026'.