Bihar cabinet authorises Gram Panchayats to levy and collect taxes in Panchayats
The Bihar cabinet has authorized Gram Panchayats to levy and collect local taxes to improve financial self-reliance. This policy change aims to reduce the administrative and financial dependence of local governing bodies on the state government.
Why it matters
This decentralization effort is intended to strengthen local self-governance and improve the implementation of development schemes at the grassroots level.
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.
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