Patna: Amid discussions on the 16th Central Finance Commission recommendation to collect Rs1200 annually from every household in rural areas, the state’s panchayati raj minister Deepak Prakash clarified on Monday that the state will try to meet the target by generating local resources for panchayat income.He told reporters that Bihar lodged its protest and sought relaxation during the national workshop held in Delhi last week regarding the recommendation.He said the Finance Commission recommended Rs51,923 crore for Bihar’s panchayati raj institutions over the next five years (2026-31), of which 10% is linked to the rural local bodies (RLB) performance grant and 10% to own source revenue (OSR).“The recommendation has been made to collect, on average, Rs1200 annually from each household. But it’s not necessary and we will try to minimise the burden and meet the target by developing vacant govt land in panchayats as ponds for fish farming and other such purposes. Making panchayats self-reliant is essential, but imposing an additional financial burden on the people in a state like Bihar would not be practical. Revenue will be generated from local resources like ponds,” he told reporters and reiterated that panchayat elections will be held on time, with no delay of any kind.In the current financial year (2026-27), the state will be allocated Rs6,670 crore and 20% of the total allocated amount will be released only after assessing the performance of the state’s panchayati raj institutions.Responding to a question about the panchayat elections, Deepak clarified that the polls would take place without the delimitation process.The Centre plans to implement holding tax and other local taxes in villages, following the pattern of municipal corporations to make panchayats financially self-reliant. Under the proposal, an annual tax of Rs1,200 would be collected from each household. In return, the plan involves providing villagers with amenities such as drinking water, sanitation, street lighting, and other basic facilities.The 16th Finance Commission has recommended making panchayats financially self-reliant so that they can spend more on development works and reduce their future dependence on central grants.
