In Bihar poll rush, politics of plenty meets fragile finances

A string of welfare schemes and promises tests the state’s budget, which is already heavily dependent on central support and spends little as capital outlay. Yash Kumar Singhal explains

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As Bihar gears up for an Assembly election, the state’s finances are once again in the headlines to gauge whether the torrent of promises unleashed by rival parties is even fiscally prudent.

The elections to the 243-member Assembly are expected to start within a month. The contest pits the ruling National Democratic Alliance (NDA), with the Bharatiya Janata Party (BJP) and Janata Dal (United) as main players, against the Indian National Developmental Inclusive Alliance (INDIA), led by the Rashtriya Janata Dal (RJD) in the state. Adding another dimension is the newly minted Jan Suraaj, led by political strategist-turned-reformer Prashant Kishor.

RJD leader Tejashwi Yadav has claimed that the Nitish Kumar government will fail to deliver on its pre-poll promises due to revenue paucity. The charge is political, but may contain a grain of truth.

Bihar’s fiscal deficit stood at 4.15 per cent in 2024-25 (FY25). Nearly 86 per cent of total expenditure went into revenue spending, while the capital outlay — at 13.34 per cent — was the lowest since FY23. The state’s own tax revenue has also weakened, slipping from 25.5 percent of total revenue receipts in FY23 to 22.2 percent in FY25.