Shail Devi unfurled the tricolour at Sadaquat Ashram, the state headquarters of Congress, in the presence of state President Ashok Choudhary and others.
Choudhary handed over a citation from Congress Vice President Rahul Gandhi to the 59-year-old woman and a cheque of Rs 51,000 in recognition of her bravery.
Devi has emerged as an unlikely hero of January 18 arson in Azizpur village in Muzaffarpur district by giving shelter to 10 members of minority community in her house and saving their lives.
Moved by her bravery, Chief Minister Jitan Ram Manjhi had dubbed her as "Rani Lakhshmi Bai of our times" and gave her a cheque of Rs 51,000 to respect her "selfless act".
Also Read
"At the present times, when leaders of a party are out to vitiate communal harmony through their poisonous assertions, a frail widow did not bother for her life and saved 10 members of another community, the act is an astounding example of carrying forward the ideology of Congress party," Choudhary said.
Asked about her courage on the January 18 when she sat in front of her hamlet locking 10 Muslims inside and bravely sending marauders away, she said, "I followed the religion of humanity. How can I see my neighbours with whom I have been living for long die in front of my eyes.