Promises of free electricity, tablets, smartphones, and allowances have become a staple in Indian elections. Ahead of the 2025 Bihar assembly elections, political parties have showered voters with grand 'freebie' promises. Women, in particular, are being wooed through numerous welfare schemes. But amid these commitments, a vital question looms: Can Bihar afford the cost of these giveaways?
Prashant Kishor from Jan Suraj Party criticized the ruling National Democratic Alliance for financially irrational giveaway announcements aimed at enticing voters before the assembly elections. Party spokesperson Pavan K. Varma stated that these tempting freebies could add a burden of approximately ₹33,000 crore to the state's treasury, especially when it already bears a ₹4.06 lakh crore debt.
What Does ₹33,000 Crore Mean to Bihar?
This amount equals 81% of the state's total development budget for this year and constitutes more than half of its tax revenue. Such a vast expense can stifle any state's economic growth, particularly when debt is already rising, with limited development prospects.
Bihar Under Debt Pressure
A NITI Aayog report from July indicated Bihar's debt-to-GSDP ratio was 39.6% in 2022–23, markedly higher than many intermediate states, with contingent liabilities exceeding those of comparable regions.
Bihar collects less in terms of tax and non-tax revenues than many of its peers. Expectations for 2025–26 predict ₹59,520 crore in tax revenue and a total income of ₹2.6 lakh crore. According to NITI Aayog, the debt-to-GSDP ratio can only decline through high growth, reduced primary deficits, or both.
Limited Development Prospects
Growth materializes from investments in developing regions, yet Bihar's budget for creating new assets — 'capital outlay' — is already scant. The total expenditure budget for 2025–26 stands at ₹2.94 lakh crore, with ₹2.52 lakh crore (85.7%) earmarked for revenue expenditure necessary for ongoing activities. This leaves only ₹40,532 crore (13.7%) for capital outlay.
Source: aajtak
The Government Couldn't Spend Last Year's Budget
indicates that Uttar Pradesh allocated 21.8% of its budget for future growth endeavors, such as roads, bridges, and hospitals. India's central budget for 2025–26 dedicated 17.7% similarly. However, a concern persists: funds earmarked for development in Bihar often get absorbed into free schemes. The remainder doesn't see effective usage. A CAG report in July revealed that ₹7,568 crore from 20 schemes remained entirely unutilized in 2023–24.
