Bihar Cabinet clears ₹9,169 crore package for urban local bodies
Bihar Cabinet approves ₹9,169 crore for 264 ULBs over five years under the 16th Finance Commission, adding performance-based criteria and urbanisation incentives.
The Bihar Cabinet, chaired by Chief Minister Samrat Choudhary, has approved the allocation of ₹9,169 crore for all 264 Urban Local Bodies (ULBs) in the state. The funds will be released over a five-year period, from 2026-27 to 2030-31, in line with the framework of the 16th Finance Commission.
Urban Development and Housing Department Minister Nitish Mishra said the decision follows the end of the 15th Finance Commission's term on March 31, 2026. The new allocation introduces key changes in how funds are distributed. While 90% of the amount will continue to be based on population, the remaining 10% will now be linked to performance. This replaces the earlier criterion where 10% was allocated on the basis of geographical area.
Mishra explained that urban bodies demonstrating better performance or generating their own resources will be eligible for additional funds under the new system. The package also includes an incentive for urbanisation: a one-time grant of ₹2,000 per person will be provided if new areas are brought under ULBs, encouraging expansion of municipal limits.
A separate Special Infrastructure Component of ₹5,000 crore has been earmarked, with 60% coming from the central government. Patna Municipal Corporation is expected to benefit from this for waste water management projects. Of the total allocation, half must be spent on waste or water management, while ULBs have autonomy over the remaining half across 18 identified functional departments.
In a separate decision, the cabinet granted administrative approval for consultancy services to prepare road user fee structures and monitor collections on state-owned roads, bridges, and structures. Additional Chief Secretary Arvind Kumar Chaudhary said the first phase will cover 47 bridges longer than 250 metres and 55 state highways.
The cabinet also approved observing the martyrdom day of Ramphal Mandal and Pandit Rajkumar Shukla annually on August 23 as state-sponsored ceremonies in Sitamarhi and West Champaran respectively. A total of 27 decisions were taken at the meeting.