The Rashtriya Janata Dal (RJD) has strongly opposed the Bihar government’s new framework allowing panchayats to levy taxes and fees, saying it will place an additional burden on the poor and small businesses.
RJD leader Sudhakar Singh alleged that while bank loans worth crores of rupees owed by large industrialists are being written off, the government is preparing to impose new taxes on poor rural residents.
Addressing a press conference on Saturday, Sudhakar Singh, president of the party’s Kisan Cell and a Member of Parliament, said Bihar continues to lag behind many other states on key indicators such as per capita income, employment, industrial development and rural incomes. At such a time, he argued, the decision would weaken the rural economy and directly affect poor families.
On July 15, the State Cabinet approved amendments empowering gram panchayats to levy various types of taxes, describing it as a major step towards strengthening the financial position of gram panchayats.
Additional Chief Secretary of the Cabinet Secretariat Department Arvind Choudhary said, “Gram panchayats already had the legal authority to impose taxes, but the necessary amendments had not been made, preventing its implementation. With the amendments now in place, panchayats will be able to collect taxes under various categories within their jurisdictions.”
Following the government’s decision, annual taxes will be imposed on permanent and semi-permanent houses in rural areas, as well as on commercial establishments. Panchayats will also be authorised to collect prescribed fees from hoardings, cinema halls, petrol pumps, LPG agencies and brick kilns.
Separate user charges will also be levied for civic services such as sanitation and water supply. The government said the new system would enhance the panchayats’ own revenue and provide additional resources for local development works.
Sudhakar Singh said the worst affected would be those who earn their livelihood by operating roadside stalls or other small businesses. He said the incomes of these people are uncertain, and even after working an entire day they often struggle to meet household expenses. Imposing house tax, water supply tax, registration fees, user charges or other local taxes would only worsen their financial difficulties.