NDA takes the crown in Bihar again, but fiscal squeeze looms

Amid the celebrations, the NDA faces a sobering reality of the state's fiscal situation. Bihar has a revenue base of ₹2.4-2.6 trillion, but nearly 60% of its revenue receipts are pre-committed to salaries, pensions and interest payments, shows government data.

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The fiscal deficit in FY26 is targeted at the 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 nonprofit that analyzes government budgets. This severely restricts room for spending on new welfare schemes, government hiring or capital-intensive projects, said experts.

Even recent boosts from the Centre offer 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 FY25 and FY26. But these inflows are modest compared to the scale of the poll promises.