The decision was taken at a cabinet meeting presided over by Chief Minister Nitish Kumar, Principal Secretary (Cabinet Coordination and Secretariat) Ravikant told reporters.
Opposition parties had earlier demanded continuation of the reservation policy.
The government also provided various benefits to the minorities and granted funds of Rs 50 crore to the State Minorities Financial Corporation for implementation of the Chief Minister Minorities Education Loan scheme with effect from this year over the next five years, he said.
It approved a grant of Rs 8 lakh to Anjuman Tarakki-E-Urdu, Bihar, for this fiscal for promotion of Urdu language, Ravikant said.
Among other decisions, the state government approved a proposal for absorption of 183 posts of additional district and sessions judges with the fast court tracks from 219 posts created for lower judiciary, besides 10 per cent of 29 posts of upper judicial services with an aim to run the fast track court system on permanent basis.
It also approved creation of 4259 posts of 'Pashu Mitras' (persons in service for protection of animals) on contract basis on a stipend of Rs 5000 per month, Ravikant said adding Rs. 8.4 crore was sanctioned to meet the immediate financial requirement for the creation of these posts.
