In terms of just the number of promises being made by both sides, this Bihar Assembly election is “unlike at least the last three state polls”, says an official of the state Finance Department.
Just before the model code of conduct kicked in, the NDA government led by Nitish Kumar capped its series of sops – with ample help from a friendly Centre – with a new scheme under which Rs 10,000 was transferred to 1.21 crore “prospective women entrepreneurs” each. The Mahagathbandhan’s de facto chief minister face, Tejashwi Yadav, then unveiled his counter: a government job for each family without one in Bihar.
By all accounts, the state can barely afford either.
For 2025-2026, the Bihar government’s budget is Rs 3.17 lakh crore. Of this, Rs 1.12 lakh crore (or more than a third) is estimated to go towards paying salaries and pensions. So far, the sops or promises announced by the two sides add up to an expenditure of Rs 1.3 lakh crore, leaving potentially just a third of the budget for Bihar to spend on other things.
It’s showering schemes
Over the past three months, the Nitish government has announced 125 MW free electricity to 1.89 lakh consumers starting August (additional annual cost to the exchequer: around Rs 5,000 crore); hiked social security pension from Rs 400 to Rs 1,100 per month starting August (additional annual cost to the exchequer: Rs 9,300 crore); announced Rs 1,000 monthly allowance for about 12 lakh unemployed youth between the ages of 18 and 25 who have studied till Class 12 or above (annual cost to the exchequer: Rs 1,500 crore); announced Rs 5,000 one-time clothing allowance for 16 lakh construction workers (cost to the exchequer: Rs 800 crore); and hiked the monthly honorarium of Jeevika, Anganwadi and ASHA workers (additional annual cost to the exchequer: Rs 100 crore).
Add the Rs 12,100 crore paid out to 1.21 crore women (Rs 10,000 each) under the Mukhyamantri Mahila Rojgar Yojana, and the total additional cost the state is looking at is about Rs 40,000 crore for this financial year. This is nearly three-fourths of its annual earnings of Rs 56,000 crore.
To fulfill its promise of a government job per family, a Mahagathbandhan government would need an additional Rs 90,000 crore annually, assuming a monthly salary of Rs 30,000 on average. Currently, the estimated government employee strength in the state is 26.5 lakh, while as per the Bihar caste survey of 2022-23, the total number of families in the state is 2.76 crore – a large gap.
The numbers
Even as the state budget has risen (from Rs 2.28 lakh crore in 2019-20 to Rs 3.17 lakh crore in 2025-26), its outstanding loan already stands at Rs 3 lakh crore. In the last five years, its annual borrowings have averaged about Rs 25,000 crore.
Says the Finance Department official: “The state government seems to have gone totally into DBT (direct beneficiary transfer) mode ahead of the polls… Almost 80% of state earnings could end up going to doles. It is not good for our financial health.”
Surya Bhushan, an economist with the Development Management Institute (DMI), Patna, said the doles and promises that have been announced are “financially insurmountable”. “The state already spends nearly 40% of its budget on salaries, pensions, and related expenses. Adding one government job per family would explode the salary bill to several times the state’s annual revenue… Implementing such a promise would require creating over 20 million new public sector jobs, an undertaking that would also more than double the state’s entire budget and vastly exceed its fiscal capacity. Even a phased or partial implementation would crowd out funds needed for infrastructure, health, and education,” he told The Indian Express.
The state of the state
A Patna-based economist who did not want to be named said it was true that under Nitish, over the past 10-15 years, Bihar has seen “good GSDP (Gross State Domestic Product)”. However, the economist points out, “the growth has been mainly in sectors such as construction, not in the primary sector of agriculture, on which 80% of Bihar’s population still depends”.
In terms of per capita income, Bihar remains among the worst performing states. In 2024-25, its per capita income (at current prices) was Rs 66,828 annually, well below the national average of Rs 2.05 lakh. The Bihar caste survey 2022-23 showed that 94.42 lakh of its 2.76 crore families (or 34%) earned less than Rs 6,000 monthly. Another 81.91 lakh families (or 30%) earned between Rs 6,000 and Rs 10,000, meaning only just over a third of the state’s population made more than Rs 10,000 a month.
Nitish himself once said: “Even if our economy grows at a much higher rate than the national average, we would take 20 years to catch up with the national average per capita income.”
The 2022-23 caste survey also showed that only 14.71% of Bihar’s population had studied up to Class 10, 9.1% had studied till Class 12, and just 6.2% were graduates.
The school dropout rate in primary classes was 8.9%, surging to 25.9% in upper primary (Classes 6-8), and 25.63% in secondary (Classes 9-10) – all lowest in the country as per the Central government UDISE + 2023-24 report.
On jobs, one of the biggest issues of this election, the picture is equally grim. Bihar’s Labour Force Participation rate is 43.4-55%, indicating that less than half of its working-age population is actively working or seeking work. This is lower than the national average.
Another Finance Department official said: “The unemployment rate among youths (15-29 years) is 9.9-10.8%, with 22.2% in urban areas and 8.8% in rural areas… Plus, almost all of Bihar’s workforce is engaged in the informal sector, with the number standing at 90.8% for male and 78.8% for female workers. Agriculture engages over half the workforce, with construction and trade other key sources of employment.”
On other indices too, Bihar lags. Rating agency CARE’s “social and economic development index” puts the state at the bottom overall among 18 states, with its ranking 17th on fiscal and infrastructural matters, 15th on financial development and social issues, and 16th on governance matters.
On other indices, such as NITI Aayog’s “export preparedness index” of 2023, Bihar was at the 27th position among 29 states.
Surya Bhushan of the DMI said, “Bihar has made some progress in the last 20 years, but fiscal health is important for long-term sustainability and for balanced regional development. Currently, Bihar’s development means Patna and a few regions.”
Deepak Kumar, a senior economist at the Asian Development Research Institute, was more cautious. “It is difficult to assess the impact of doles on the economy immediately, especially the promise of government jobs, without knowing the details. However, it will certainly have an impact on the state exchequer, which might result in an increase in public debt and taxes.”