Bihar cabinet authorises Gram Panchayats to levy and collect taxes in Panchayats
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
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,, 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 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 BriefWire