New Delhi: The National Democratic Alliance (NDA) delivered a landslide victory Friday in Bihar, winning 202 out of 243 seats. The challenges start now, given the ambitious promises the BJP-JD(U) alliance has made in its election manifesto.
Economists and experts are of the opinion that it will be very difficult for the NDA to meet these promises given the state’s stressed state’s finances.
From promising government jobs to over one crore youths to making one crore women lakhpati didis, providing free power of up to 125 units annually to giving Rs 3,000 annually to every farmer, and more—the NDA has committed almost everything to Bihar voters.
The Rashtriya Janata Dal (RJD)-Congress-led Mahagatbandhan, too, were not far behind, promising jobs to one member in every family within 20 days of coming to power among other such assurances.
For a state with a 40 percent debt-to-GSDP ratio, and which is barely able to cover the salary cost of its employees from its own sources of revenue, arranging the finances to implement the schemes is not just ünsustainable: it will weaken the state’s ability to make routine welfare payments.
In the 2025-26 fiscal, Bihar is estimated to spend Rs 1,08,094 crore on committed expenditure (salaries, pension and interest payments), which is 42 percent of its estimated revenue receipts. This leaves very limited space for capital spending on development and building new infrastructure.
An analysis of Bihar’s 2025-26 budget by independent think tank PRS Legislative Research shows the fiscal deficit is targeted at 3 percent of the GSDP (Rs 32,718 crore). In 2024-25, as per the revised estimates, the fiscal deficit is expected to be 9.2 percent of GSDP, higher than the budgeted 3 percent of GSDP.
In such a scenario, what do the manifesto promises of the NDA mean for Bihar’s future in terms of reducing poverty and unemployability?
Many of the experts ThePrint spoke to said they do not see many of the NDA promises getting implemented unless the central government chips in with grants.While Bihar’s revenue expenditure will go up, but with no growth in revenue, it will be a tighrope walk for the state government, they said.
‘Difficult to actualise promises’
Professor Deepanshu Mohan, Director, Centre for New Economics Study, Jindal School of Liberal Arts and Humanities, calls the manifesto promises as “populism on borrowed time.”
“For a state like Bihar, which has already seen a revenue deficit of almost 1.5 to 2 percent of its state domestic product, my sense is that you cannot actualize a lot of the promises in the immediate context,” Professor Mohan told ThePrint.
A case in point, he said, is Maharashtra, where of the actual sum that was promised under the Ladki Bahin Yojana, the transfer did not take place at one go. “It was disbursed in tranches … just for the government to say that ‘we have met our promise’. But they did it with a lag, which is not consistent with what they might have said in the manifesto.”
Mohan said that fiscally, for every Rs 100 of production in Bihar, Rs 40 goes into debt- related payments. “So, we have to look at the facts very consistently. The debt receipts in Bihar for even capital revenue expenditure is not less than 90 percent, which means that you have very little margin for doing any kind of discretionary spending or new schemes.”
Punjab, he said, is another classic example. “The state had a lot of debt when the Aam Aadmi Party was coming to power. The AAP came with all these sorts of promises … .free power and all ….whatever it was doing in Delhi. And, it was argued that you can’t do that because a lot of your debt payments are an overhang of previous electoral processes… We are going to see a very similar process in Bihar.”
Mohan said that if the NDA is talking about direct transfer to women, the fiscal space for doing so is extremely limited in Bihar. “The reason for that is because the state has a very high accrued debt. If you see a lot of recent elections, a lot of states, which were in debt, have not been able to actualise what they had promised.”
According to the Bihar Economic Survey 2024-25, which was released in April, Bihar’s total borrowing was Rs 60,218 crore in 2023-24 and the public debt repayment was Rs 22,979 crore. By the end of the fiscal year 2023-24, the outstanding debt was Rs 3.32 lakh crore.
The government should invest in capital expenditure to pull Bihar out of its present position at the bottom of the ladder, said Professor Alakh N.Sharma, Director of Delhi based Institute for Human Development.
“The kind of promises that the NDA has made, the government’s committed expenditure will go up instead of the capital expenditure. There is simply no money left in Bihar budget, which can be spent from its own sources of revenue after meeting the salaries of government employees. From where will they provide one crore jobs?” he asked.
Instead of indulging in populism, experts feel that if the NDA is really serious about transforming Bihar, they should invest in quality education, jobs and building infrastructure.
“Everybody now acknowledges that it’s not only the government but the private sector that needs to chip in for creating jobs. But private investment in Bihar is very small and the government should do its best to boost it. Manufacturing jobs also need to be expanded. Steps have been taken but it is not enough,” he said.
The Comptroller and Auditor General (CAG) report on state finances for the year 2023-24 shows the public debt-GSDP ratio has increased from 25.47 percent in 2019-20 to 32.78 percent in 2023-24, which indicates entailing risk in debt stabilisation.
Though the poverty rate has declined considerably, it still continues to have the highest poverty rate at 33.76 percent (2021-22) among India states, according to the 2023 Niti Aayog’s Multidimensional Poverty Index.
Bihar’s per capita income (Rs 66,828) is much lower than neighbouring states like Jharkhand (Rs 1,15,960), West Bengal (Rs 1,71,184) and Uttar Pradesh (Rs 1,07,468).
Also Read: Bihar beyond Buddha and Mandal—why the 2025 polls are critical for Indian democracy
Fiscal consequences
Neeraj Kaushal, professor of Social Policy at Columbia University, who travelled across Bihar for over a week last month, told ThePrint that the kind of promises made by both the BJP-led NDA and the RJD-Congress led Mahagathbandhan, if implemented are bound to have fiscal consequences.
Added to this is the fact that most of the schemes are vague on details.
Kaushal cited the example of the Mukhyamantri Mahila Rozgar Yojana, where the Bihar government has promised to transfer Rs 10,000 to one woman member in every family with certain qualifications to help them become self-reliant. “Most women, for instance, don’t know that they could prepare business plans to seek loans from banks. But some 1.5 crore women have already received the initial seed grant money in their accounts.”
The political parties, Kaushal said, always make tall promises, which they can’t or don’t deliver and voters know it but in this case, the only good part is that these people (read NDA) have already delivered.
“The good part is the intended beneficiaries have actually received the entire amount unlike earlier where they used to get only a certain part of what was meant for them. So it’s a very efficient transfer of welfare funds, and in some ways, you know, that’s better than what used to happen earlier when there were leakages.”
However, it would have fiscal consequences, Kaushal added. “It’s a dangerous path in the sense that the money already transferred under two of the schemes is 10 percent of the state’s revenue expenditure for this year… that’s a very large proportion. State governments are only allowed 3 percent fiscal deficit but in 2024-25, Bihar’s fiscal deficit was three times higher. So, delivery of these promises will definitely have an impact on the fiscal health of the state.”
The ripple effect
Though the Bihar government will have to figure out the finances to implement the various schemes announced in the manifesto, some experts feel that the economic ripple effect of the measures will be immediately visible.
“The Rs 10,000 being given to women (under the Mukhyamantri Mahila Rozgar Yojana) is a productive incentive link and will be provided up to Rs 2 lakh for self-employment. Even if 40 percent of these benefitted women become self-reliant, it will be revolutionary,” said Bakshi Amit Kumar Sinha, a faculty at the Bihar Institute of Public Finance and Policy, an institute under Bihar government’s finance department.
“The rise of the old age pension is real help for the elderly. The private investment through industrial parks, etc. will boost confidence of the private sector. The economic ripple effect will be immediately visible. These steps will play a bigger role in the state’s development.”
But Sinha said that to have a real transformation, the government will have to create the ecosystem to further boost private investments. “Development globally has happened where private investments have taken the primary responsibility of economic growth, since the first industrial revolution to the latest fourth industrial revolution,” he said.
“But in a low private investment state like Bihar, the state government’s role is huge in the area of education, health, infrastructure, investment, welfare, social security, etc. In every sphere, the state government has to play a very crucial role in a very limited resource.”
Kaushal agreed with this view. “The growth in GSDP during Nitish Kumar’s 20-year rule has been tremendous, she said. “There is growth, there is women’s empowerment. He’s been able to keep communal forces at bay. He has also been able to keep caste forces at bay. In a lot of ways providing for all women, and other programmes that are universal take you beyond the caste equation. But fiscally he is going to be in trouble, unless he gets some kind of a grant from the central government,” she added.
(Edited by Tony Rai)