The state has a revenue base of ₹2.4 trillion to ₹2.6 trillion, but nearly 60% of its revenue receipts are pre-committed to salaries, pensions and interest payments, shows government data. The state’s fiscal deficit in FY26 is targeted at Centre’s 3% cap, assuming a 10% decrease in revenue expenditure and a 7% decline in capital outlay over the revised estimates of FY25, according to PRS Legislative Research, a non-profit that analyzes government budgets.
This severely restricts room for discretionary spending on new welfare schemes, government hiring or capital-intensive projects, according to experts.
Even recent boosts from the Centre offer only partial relief. The 15th Finance Commission raised Bihar’s share of central taxes from 9.665% to 10.058% for 2021-26, factoring in population, disparity and economic performance, and provided grants for rural local bodies for 2024-25 and 2025-26. But these inflows are modest compared to the scale of the commitments in the NDA’s Sankalp Patra or manifesto for the Bihar elections.
Promises vs reality
The manifesto promises 10 million jobs, seven new expressways, several upgraded airports, and large agricultural and women-focused livelihood programmes. Converting these promises into deliverable programmes will require unprecedented financial engineering, heavy central assistance, and strong administrative capacity, experts said.
“The NDA’s sweeping victory will provide Bihar with political stability and closer alignment with the Centre, substantially improving the prospects of delivering large-scale infrastructure and welfare commitments, including 10 million jobs, multiple expressways and airports, and major women-focused livelihood programmes,” said Manoranjan Sharma, chief economist at Infomeics Ratings Ltd, a credit rating agency.
“However, translating these ambitious promises, especially the 10 million jobs pledge, into sustained economic gains will demand careful sequencing, substantial central and PPP (public-private partnership) financing, strict fiscal discipline, and strong administrative capacity,” Sharma said. “Otherwise, the state risks rolling out costly, short-duration schemes that could deepen fiscal stress. There are significant implementation challenges: land acquisition, environmental clearances, project management capacity, and the broader issue of prioritising quality over quantity in new employment.”
Sharma warned that without strong private-sector integration, many of the promised jobs may end up being low-wage or temporary ones, or tied to asset-creation schemes with limited long-term impact. “Ultimately, delivery at this scale will hinge on large central inflows, robust private investment, innovative financing models, and prudent fiscal management since the commitments far exceed Bihar’s current fiscal capacity,” he added.
The economic pressure will be particularly severe from infrastructure promises. Expressways cost ₹150-200 crore per kilometre, so seven new corridors are far beyond what Bihar can fund from its own capital outlay and borrowing limits, according to PRS.
Airport upgrades and agricultural infrastructure expansion would add more fiscal strain. Implementing these at scale would depend on central co-financing, PPPs, special purpose vehicles (SPVs) and concessional loans, each of which is vulnerable to delays due to land acquisition challenges, weak contractor capacity, and project governance issues long associated with the state, said experts.
Government hiring is constrained as well. The 10 million jobs target rests on a combination of government recruitment, private-sector placements, and self-employment schemes. But even modest additions to the state payroll would lock Bihar into decades-long salary and pension obligations. Budget data from PRS Legislative Research shows committed expenditure accounted for 40-65% of revenue receipts in recent years, leaving limited space for recurring liabilities without new taxes, offsetting cuts or higher borrowing.
The state’s administrative churn compounds its fiscal strain. A PRS analysis showed that over 2020-25, almost 60 elected representatives served as ministers, with around 20 departments headed by four or more ministers. Portfolios such as tourism, law, disaster management, and revenue & land reforms had six or more ministers each. Only the chief minister and two others held their posts over the full five-year term. Meanwhile, 84% of ministers from the legislative assembly and two from the legislative council are re-contesting this election, signalling both continuity and volatility in the administrative framework, according to PRS.
‘Fundamental change in mindset’
Nishant Kumar, associate professor, centre for political studies at Jawaharlal Nehru University, cited the announcement of schemes worth ₹4 trillion in the past few months as the reason for Bihar again showing faith in the NDA. “This has brought a fundamental change in the mindset of Bihar’s people,” he said, underscoring the expectations from the next government.
“The real game-changer is the ₹10,000 given to women of the state to become economically independent,” Kumar said. “Nitish Kumar has been working on schemes for women’s empowerment since 2006. The current measure actually hit the right chord with women voters. It has been very successful in consolidating the vote behind the NDA.”
Amit Kr. Singh, associate professor, special centre for national security studies at Jawaharlal Nehru University, said, “The results in Bihar are along expected lines, and continuation of the government there will help the state emerge stronger, both politically and economically, at the national level.”
Citing that India is the only economy globally that is showing consistent growth despite prevailing global headwinds and geopolitical disturbances, Singh said, “Bihar could also take advantage of this to grow its own manufacturing and emerge as a major national hub. This time, there will be a definite change in the way Bihar gains its importance nationally.”
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