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Home Bihar

Why Is Bihar Giving Gram Panchayats More Power? New Bill Expands Revenue and Building Control

The Bihar Panchayat Raj (Amendment) Bill proposes to allow Gram Panchayats to collect advertisement fees and regulate building construction in rural areas, aiming to strengthen local finances and improve planned development.

Vanshika Krishna by Vanshika Krishna
July 21, 2026
in Bihar
Reading Time: 2 mins read
Why Is Bihar Giving Gram Panchayats More Power? New Bill Expands Revenue and Building Control
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Patna: The Bihar government has proposed expanding the powers of Gram Panchayats through amendments to the Bihar Panchayat Raj Act, allowing village local bodies to generate additional revenue and play a greater role in regulating construction in rural areas.

A copy of the Bihar Panchayat Raj (Amendment) Bill was distributed among members of the Bihar Legislative Assembly on Tuesday. If passed, the Bill would authorise Panchayats to collect advertisement fees and oversee the approval of building plans in areas under their jurisdiction.

Panchayats to Collect Advertisement Fees

One of the key provisions of the proposed legislation allows Gram Panchayats to levy fees on hoardings, banners and other advertisements displayed within their jurisdiction.

According to the state government, the Bihar Panchayat Raj Act, 2006 does not currently provide for the collection of advertisement fees, limiting Panchayats’ ability to raise revenue from such sources.

Officials said the amendment is intended to strengthen the Own Source Revenue (OSR) of Panchayats by creating a new stream of locally generated income. The Bill also includes provisions enabling Panchayats to levy fees on additional items in the future, where required.

Greater Control Over Rural Construction

The proposed amendment also seeks to give Gram Panchayats a larger role in regulating construction activity in rural Bihar.

According to the Bill, Panchayats would be empowered to establish systems for scrutinising building plans, approving construction proposals and issuing completion certificates in non-planned areas.

The proposal comes as rural areas witness an increase in the construction of apartment buildings and other large structures.

Focus on Planned Rural Development

The government said the new framework is intended to promote planned development by ensuring that new construction takes into account essential public infrastructure.

According to the proposal, factors such as roads, drainage, sewerage, parks, public safety, healthcare facilities and educational infrastructure would be considered while regulating development.

Officials said the move would also help local bodies monitor and act against construction that does not comply with prescribed standards.

What’s Next?

The Bihar Panchayat Raj (Amendment) Bill will now be considered by the Legislature. If enacted, the legislation would expand the administrative and financial powers of Gram Panchayats, giving them greater responsibility for local revenue generation and rural development planning.

Tags: Bihar PanchayatGram Panchayat

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