Bihar elections: NDA's vision of Viksit Bihar faces fiscal roadblocks

In the runup to elections, the alliance's manifesto listed 25 prominent promises

Bihar’s public finance, plagued by high fiscal deficit and meagre capital expenditure, remain a bottleneck in fulfilling the promises laid out in the “Sankalpa Patra” (manifesto) of the National Democratic Alliance (NDA), notwithstanding its landslide victory in the just-concluded Assembly polls. 

The collective manifesto of the NDA listed 25 prominent promises for a “Viksit Bihar”, including a slew of initiatives to dole out transfer payments to the vulnerable sections of society, and a host of programmes to boost infrastructure connectivity, build a manufacturing base, and increase employment opportunities in the state. 

The NDA’s manifesto called for improved infrastructure connectivity, and enhanced urban development through various promises — building of expressways, modernisation of railway services, introduction of Metro and NaMo rapid rail services, development of greenfield international airports, establishment of satellite townships and greenfield city in New Patna, development of “education city” and “sports city” in the state, and a world-class medi-city along with medical colleges in every district. 

However, paucity of Bihar’s finances may not help the NDA in their endeavor. Nearly 86 per cent of Bihar’s total expenditure in 2024-25 (revised estimates) was revenue in nature, with capital outlay forming just 13.34 per cent of the state’s total expenditure. The budgeted share in 2025-26 for capital outlay was just 13.78 per cent, with 85.69 per cent share going to revenue expenditure. Meanwhile, Bihar’s own tax revenue as a share of its revenue receipts was a meagre 22.2 per cent in 2024-25 (revised estimates). 

All of this constrains the ability of the Bihar government to spend on tangible developmental activities. 

Further, the NDA had promised freebies to women, the poor, and the backward classes in Bihar. These included a “Panchamrit” guarantee for the poor, Mukhyamantri Mahila Rozgar Yojana to give a financial support of ₹2 lakh to women, Karpoori Thakur Kisan Samman Nidhi wherein a yearly amount of ₹3,000 will be given to the farmers, and a ₹10 lakh support to different business groups owned by extremely backward classes. 

This would put even greater pressure on the precarious fiscal position of the state, which was already in a deficit of 4.15 per cent in 2024-25. Bihar also had a revenue deficit in 2024-25, and such freebies, if implemented, would strain the state’s revenue balance further. 

The NDA had also promised over 10 million employment opportunities, including government jobs, coupled with a focus on establishing new-tech manufacturing units and industrial parks. The unemployment rate in Bihar came down vis-a-vis the national average in 2023-24 to reach 3 per cent. 

However, Bihar is the poorest state of the country with one-third of its population facing multidimensional poverty, more than twice the national average, according to NITI Aayog’s data for 2019-21. Although the promises reflect the lofty aspirations to wean Bihar away from the BIMARU tag, the state currently lacks the required ammunition to realise the vision of “Viksit Bihar”, and may need innovative ideas for achieving the goal.