Bihar announces OTS scheme for brick kilns, waives ₹90 crore interest on outstanding dues
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The Bihar government has launched a three-month One-Time Settlement (OTS) scheme to recover outstanding dues from 6,000 brick kiln owners. The initiative waives ₹90.26 crore in interest, aiming to recover the remaining ₹226.40 crore in principal royalties.
Bihar Launches Strategic OTS Scheme for Brick Kiln Sector
On September 18, 2026, the Bihar government announced a significant One-Time Settlement (OTS) scheme aimed at resolving a mounting financial impasse within the state's brick kiln industry. With approximately 6,000 brick kiln owners currently entangled in outstanding royalty payments, the government’s move is designed to provide immediate fiscal relief while simultaneously securing the state's revenue stream. The scheme, which officially commences on September 21, 2026, and remains active for three months, offers a structured pathway for owners to clear their principal dues.
Financial Scope and Debt Structure
The scale of the outstanding debt underscores the severity of the financial challenges facing the sector. According to official data provided by the state, the total outstanding dues amount to ₹316.66 crore. This figure is bifurcated into two primary components: ₹226.40 crore in outstanding royalty payments and ₹90.26 crore in accumulated interest. By choosing to waive the interest component entirely, the Bihar government is prioritizing the recovery of the principal royalty, which represents the core revenue due to the state exchequer.
Addressing Revenue Recovery Challenges
The necessity for this OTS scheme stems from the limited efficacy of traditional recovery methods. Prior to this announcement, the government had attempted to recover dues through rigorous administrative measures, including certificate proceedings and the filing of First Information Reports (FIRs) by District Mining Officers. Despite these efforts, only ₹27.28 crore was successfully recovered, leaving a staggering ₹289.38 crore still pending. This shortfall highlights the difficulty of enforcing collections in a decentralized sector and justifies the shift toward a more collaborative, incentive-based approach.
Implications for the 2024-25 Season
This specific policy intervention is tailored for the 2024-25 brick kiln season, reflecting the state's commitment to stabilizing the industry for the upcoming operational cycle. By incentivizing compliance through interest waivers, the government likely aims to bring a significant portion of the 6,000 affected units back into full regulatory compliance. This ensures that the state can maintain a steady flow of mining royalties, which are critical for the infrastructure and development funds managed at the district level.
Future Outlook and Economic Stability
Looking ahead, the success of this three-month window will be a critical indicator of the health of Bihar’s construction material supply chain. If the majority of the ₹226.40 crore in principal is recovered, it will not only provide a fiscal boost to the state but also clear the legal and financial burden currently weighing on thousands of small-scale entrepreneurs. The government's decision to pivot from punitive measures to a settlement-based strategy represents a pragmatic approach to economic governance, ensuring that the brick kiln industry remains a viable contributor to the state's economy without being stifled by insurmountable interest arrears.
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