Bihar to take USD 500 million loan from World Bank for urban development

The Bihar cabinet chaired by Chief Minister Samrat Choudhary on May 6 gave its nod to get a Rs 4,740 crore (USD 500 million) loan from the World Bank for the Bihar urban transformation programme, a major initiative aimed at supporting planned urbanisation and the comprehensive, integrated development of towns across the state.

Deputy chief ministers Vijay Kumar Chaudhary and Bijendra Prasad Yadav attended the cabinet meeting. Officials said the programme would drive sustainable, climate-responsive urban growth and attract private investment in city infrastructure over the long term.

The plan to procure loan for urbanisation follows the earlier decision of the state government to develop 11 new greenfield satellite townships in different parts of the state. These townships will be set up in Patna, Sonpur, Gaya, Darbhanga, Saharsa, Purnia, Munger, Muzaffarpur, Chhapra, Bhagalpur and Sitamarhi.

To prevent haphazard growth, the government has halted land purchases, sales, transfers and all construction activities in the identified core and special zones until the master plans are finalised. The zonal plan for Patna is expected by March 31 next year, while master plans for the remaining townships are targeted for completion by June 30, 2027.

Another decision that is likely to have a direct impact on road users is the state government’s plan to start collecting toll tax on state highways, important district roads and bridges. The road construction department (RCD) has been asked to identify suitable stretches of infrastructure for imposing user fees and to select agencies for collection. The government is expected to notify the Bihar road user fee rules-2026 within the next one month, after which toll recovery is set to begin. Proceeds from the tolls will be ploughed back into road maintenance and upkeep.

Additional chief secretary (cabinet) Arvind Kumar Chaudhary, while briefing reporters after the meeting, said the cabinet cleared 20 proposals covering urban development, infrastructure, skills, education and women’s safety. Among them is the procurement and operation of 400 new air-conditioned electric buses under the Prime Minister’s e-bus scheme — 150 for Patna and 50 each for Muzaffarpur, Bhagalpur, Gaya, Darbhanga and Purnia — at a revised cost of ₹517 crore. The government has also approved a massive ₹15,967 crore scheme for the maintenance of 19,305 kilometres of roads over the next seven years through performance-based contracts, supported by an AI-powered central command centre in Patna for real-time monitoring.

In a bid to make governance more technology-driven, the cabinet approved the constitution of Bihar artificial intelligence mission to impart quality training to legislators, officers and employees. It also cleared the modernisation of 75 industrial training institutes (ITIs) into advanced skill centres at a total cost of ₹3,615 crore and sanctioned a ₹344 crore package for IIT Patna, including a research park and incubation centre expansion.

The meeting also cleared free transfer of 1.85 acres of BIADA land for Patna airport expansion and extended the validity of the Bihar Industrial Investment Promotion Package-2025 till June 30, 2026. Introduction of e-voting for senior citizens, divyang persons and out-of-state voters in the 2026 municipal polls was another notable decision.

Chaudhary said that the cabinet also gave its nod to rename the under construction government medical college and hospital at Sitamarhi after Goddess Sita. The institution will now be called Maa Sita Medical College and Hospital, Sitamarhi.