PATNA, July 11 -- In a move to make village-level governance more self-sufficient, the Bihar government is actively considering the introduction of property tax - or holding tax - on rural households, to be collected through gram panchayats. Panchayati raj minister Deepak Prakash has confirmed that the state is exploring multiple avenues to boost revenue for local bodies, including nominal charges on private houses and higher rates for commercial establishments and markets. The proposal, which officials say could be placed before the cabinet in the coming months, draws directly from the recommendations of the 16th Finance Commission. Talking to HT, Prakash emphasised the need for panchayats to stand on their own feet. "Making panchayats self-reliant is essential," he noted, while cautioning against putting undue burden on ordinary villagers in a state like Bihar. He indicated that the government would seek to meet revenue targets partly through local resource generation - such as developing government-owned ponds for fish farming and other productive uses - rather than relying solely on direct taxes. The 16th Finance Commission has recommended substantial grants for panchayats over the 2026-31 period, with a portion tied to performance in generating own-source revenue (OSR). For Bihar, this includes incentives for local bodies that improve collections from taxes and user charges. The idea is to mirror urban municipal practices in rural areas, where panchayats would fund basic services like tap water supply, sanitation, street lighting and minor infrastructure works. Gram panchayats in Bihar already have the authority to collect fees from rural weekly markets (haats), vehicle-related charges, and transmission towers. Panchayati raj institutions have already been tasked to manage rural water supply schemes and collect user charges. However, collection has been disrupted owing to weak enforcement mechanisms and poor maintenance of the supply system. To address this, the state has rolled out the "Samarth Panchayat" digital platform, which allows real-time monitoring of finances, property registration and revenue streams. Officials estimate that once fully implemented, the holding tax could generate meaningful resources across Bihar's two crore plus rural households. Individual liabilities are expected to remain modest for residential properties - potentially up to Rs.1,200 annually depending on location, size and type - while commercial holdings would face steeper rates. The move has already sparked debate. Supporters see it as a long-overdue step toward genuine decentralisation and better delivery of services at the grassroots. Critics worry about the impact on rural households already grappling with economic pressures. Prakash himself has publicly sought relaxations in the Finance Commission's performance-linked targets during a recent national workshop in Delhi, arguing that states like Bihar need flexibility. This isn't entirely new territory. Property taxation has been a mainstay of urban local bodies in Bihar for years, with varying slabs based on annual rental value and property type. Extending a structured version to villages would mark a major policy shift, potentially transforming how development funds are mobilised and spent in rural Bihar. A draft proposal is expected to be finalised soon. Its final shape - including exemptions, slabs, and collection mechanisms - will become clearer after cabinet approval. For now, the state appears to be treading carefully, balancing the push for fiscal autonomy with the ground realities of rural life and mounting political heat....