Bihar Cabinet Approves Revised Finance Rules and Delegation of Powers for Scheme Approvals

Patna: The Bihar Cabinet has approved the Finance Department’s proposal to revise the Bihar Finance Rules and delegate powers for scheme approvals. The decision, taken during a Council of Ministers meeting, is aimed at streamlining procurement processes, promoting local industries, and ensuring efficient financial discipline.

Key Features of Bihar Finance (Amendment) Rules, 2024

The Bihar Finance Rules, originally established in 1950 and last amended in 2005, have been updated to align with advancements in technology and global procurement standards. The revised rules delegate financial powers for purchasing goods and services, categorized as follows:

• Goods and Works Procurement:
  • Up to Rs. 25 lakh: Approval by the Administrative Department with the Internal Financial Advisor’s consent.
  • Rs. 25 lakh to Rs. 1 crore: Approval by the Administrative Department with Finance Department consent.
  • Above Rs. 1 crore: Approval by the Finance Department with Cabinet consent.
• Consultancy Services:
  • Similar approval thresholds apply as for goods and works.
• Non-Consultancy Services:
  • Up to Rs. 50 lakh: Administrative Department approval.
  • Above Rs. 50 lakh: Cabinet approval.

Other notable changes include the implementation of the Quality and Cost-Based Selection (QCBS) method for effective consultancy procurement and a requirement for Cabinet approval in exceptional cases for QCBS use in non-consultancy services. Local industrial units will receive a 50% exemption in performance security, alongside a waiver of bid security, to encourage local enterprise participation.

Revised Guidelines for Scheme Approvals

The new delegation of powers for scheme approvals aims to accelerate development projects and strengthen public welfare initiatives. Highlights of the revised guidelines include:

• Procurement Approvals:
  • Up to Rs. 25 lakh: Administrative Department.
  • Rs. 25 lakh to Rs. 1 crore: Finance Department.
  • Above Rs. 1 crore: State Cabinet.
• Recurring Expenditures:
  Schemes with recurring costs during implementation will not require re-approval unless structural changes are made.
• Pre-Investment Activities:
  The financial limit for activities such as preparing feasibility reports has been increased from Rs. 10 lakh to Rs. 1 crore. Approval for these activities now lies with the departmental minister, while amounts exceeding Rs. 1 crore require Cabinet approval.
• Loan Approvals:
  Cabinet approval, following Finance Department consent and Public Finance Committee recommendations, is now mandatory for all loan-related cases.
• Manpower and Vehicle Services:
  Defined powers of approval have been established for procuring manpower and vehicle services from contractual and external sources.
• Bank of Sanction (BOS):
  A BOS framework has been introduced to ensure continuity and financial discipline in capital expenditure schemes.

The Finance Department highlighted that these reforms would enhance financial discipline, improve administrative efficiency, and bolster Bihar’s development agenda. The new rules also reflect the government’s commitment to promoting local industries and creating an investment-friendly ecosystem in the state.