Paddy stubble management is essential for sustainable agriculture, particularly in rice?wheat systems where large amounts of residues are generated within a short period. Improper disposal, especially residue burning, causes environmental pollution, nutrient loss, and soil degradation, highlighting the need for sustainable management practices. Recent research investigates lignocellulolytic bacterial consortia as eco-friendly alternatives for in situ residue degradation. Paddy straw's complex cellulose, hemicellulose, and lignin make microbial breakdown challenging; thus, microbial consortia with complementary bacteria are used. These produce enzymes like cellulases, xylanases, laccases, and peroxidases, facilitating the breakdown of plant polymers. Advances in metagenomics, enzyme profiling, and microbial engineering are enhancing consortia design. Challenges include environmental variability, microbial survival, formulation stability, and large-scale application. Ultimately, these consortia offer a sustainable solution for residue management, aiding climate change mitigation, soil health, and circular agriculture.