Patna: The Bihar government has begun operationalising the Bihar Green Climate Fund (BGCF), a new state-level mechanism aimed at financing climate change mitigation and environmental protection initiatives through fresh cess collections across multiple sectors.
The move is expected to affect vehicle buyers, contractors and mining operations, while also expanding the state’s financial pool for activities such as tree plantation, biodiversity conservation and pollution control.
Here is an explainer on what the Bihar Green Climate Fund is, how it will function and why it matters.
What Is the Bihar Green Climate Fund?
The Bihar Green Climate Fund (BGCF) was established to address the growing impact of climate change and environmental degradation in the state.
The fund was first announced in Bihar’s 2025-26 budget with an initial corpus of Rs 25 crore. However, reports suggest little visible implementation took place during its initial phase.
The fund later received formal approval from the Bihar cabinet on April 29, 2026 though details regarding the total allocation and revenue generation mechanisms were not publicly disclosed at the time.
What New Charges Have Been Introduced?
The state government has now introduced a series of cess charges to generate revenue for the fund.
Click here to see the copy of official gazette notification
New Vehicle Registration to Become Costlier
People purchasing new vehicles in Bihar will now have to pay an additional 1% cess on registration fees.
However:
- Electric vehicles (EVs) have been exempted
- The additional charge applies only to non-electric vehicle registrations
Contracts of all Works Departments, Corporation and Boards to Attract 0.25% Cess
The Agriculture Department has issued orders introducing a 0.25% cess on contract-related works linked to agricultural schemes.
The order covers major state-run agricultural bodies, including:
- Bihar State Agricultural Marketing Board
- Bihar State Seed Corporation Ltd
- Bihar Fruit and Vegetable Development Corporation Ltd
- Bihar State Agro-Industries Development Corporation Ltd
According to the order, 0.25% of the total contract value executed through these agencies will be directly deposited into the Green Climate Fund.
Sand and Gravel Mining to Face Additional Levy
A 0.50% cess will also be imposed on royalty amounts generated from sand and gravel mining under the Department of Mines and Geology.
Other Development Works Also Covered
The government has additionally decided to impose:
- 0.25% cess on contracts linked to development works across other departments and boards
Where Will the Money Be Used?
According to the draft framework, the money generated through BGCF will be used for:
- Tree plantation drives
- Biodiversity conservation
- Pollution control measures
- Environmental awareness campaigns
- Climate change mitigation projects
Officials also plan to supplement the fund through:
- Corporate Social Responsibility (CSR) contributions
- Voluntary donations
- Environmental compensation payments
- National and international climate grants
What Does ‘Non-Lapsable Fund’ Mean?
The BGCF has been designated as a non-lapsable fund.
This means:
- Unused money at the end of a financial year will not expire
- Remaining funds will automatically carry forward into the next year’s budget
Such structures are generally designed to ensure continuity in long-term projects such as climate adaptation and environmental restoration.
Who Will Manage the Fund?
The state has constituted a registered body called the Bihar Green Climate Fund Society to oversee monitoring and management of the fund.
The society will be responsible for:
- Fund administration
- Monitoring utilisation
- Ensuring implementation of climate-related projects
Why Is the Fund Significant?
The launch of the BGCF reflects Bihar’s attempt to create a dedicated climate financing mechanism at the state level.
The move comes amid increasing concerns over:
- Heatwaves
- Flooding
- Groundwater depletion
- Pollution
- Extreme weather events linked to climate change
However, questions remain regarding:
- Transparency in fund utilisation
- Long-term implementation plans
- Accountability mechanisms
- The economic burden of additional cess on citizens and businesses
Environmental experts say the effectiveness of the fund will ultimately depend on whether the collected revenue is translated into measurable climate resilience and ecological restoration projects across Bihar.
