It says much about the longevity and acumen of a politician when he returns for the 10th time as chief minister of a state. In the case of Nitish Kumar, the laurels get magnified by the sweep of his party, Janata Dal(U)’s electoral performance. Beating all odds, it has doubled its previous tally to 85 seats. The success owes much to the social coalition he has painstakingly built over the years. The JD(U)’s support base among extremely backward classes (EBCs) and Dalits, augmented by substantial backing from women across these sections, has provided accretion to the support bases of the BJP and other NDA allies.
Providing heft to his campaign were the targeted welfare deliveries that he has made in the past and has now promised in his 10th term. That voters have prioritised welfare deliveries over Nitish’s serial political realignments, and the fact that Bihar remains at the absolute bottom on every socio-economic indicator.
The septuagenarian leader will have to reckon with the fact that Bihar continues to be the largest source of out-migration – a consequence of inadequate employment opportunities. Its economy remains trapped in a vicious cycle: agriculture hampered by fragmented landholdings and concentrated ownership, and a services sector largely confined to government employment. The near absence of organised industry and the state’s inability to attract investments represent a governance failure that transcends political partisanship. His years of administration have prioritised road and bridge construction, while education and health have languished.
There is also some concern about whether he will be able to deliver on his welfare promises without further impairing precarious health. The Mukhyamantri Mahila Rojgar Yojana has been credited by many as consolidating the NDA’s women’s vote bank. It began with a simple R10,000 transfer to 7.5 million women in Jeevika SHGs; today that number stands at 15 million. Translate that into fiscal terms, and the outlay already touches R15,000 crore. The meter is still running with enrolments open till December. More importantly, the NDA has promised up to R2 lakh in assistance, to be followed by an assessment six months later. Whether this is a grant, a soft loan or a hybrid remains unclear.
By the end of 2024-25, Bihar’s total debt was Rs3.48 lakh crore. This is 38.9 per cent of the state’s GDP
The NDA manifesto has promised 10 million government jobs. Even at a modest salary of Rs15,000-20,000 a month, the annual bill for this would be Rs1.8-2.4 lakh crore, against the state’s total budget of Rs3.17 lakh crore. The prospect of fulfilling this promise appears remote.
Nitish’s promises need to be viewed against the matrix of Bihar’s earnings and expenses. In 2024-25, Bihar spent about Rs3.27 lakh crore. Its income was only Rs2.44 lakh crore. This means the state spent Rs82,000 crore more than it earned. To cover some of this gap, the government has borrowed Rs63,000 crore.
Big gap
When a government spends more than it earns, it is called a fiscal deficit. In 2024-25, Bihar’s fiscal deficit was 9.2 per cent of the state’s GDP, when India’s overall deficit was only 4.8 per cent. This shows a big gap between Bihar’s income and spending, which is risky for the economy.
This year’s budget claims the deficit will be reduced by more than half – to 3 per cent. According to the 2025-26 budget, Bihar will earn Rs2.61 lakh crore and spend Rs2.94 lakh crore. The deficit will again be met through loans.
By the end of 2024-25, Bihar’s total debt was Rs3.48 lakh crore. This is 38.9 per cent of the state’s GDP. In simple terms, for every 100 rupees Bihar produces, it owes 40 rupees. With a population of more than 130 million, this works out to about Rs27,000.
According to the CAG report, only 11 states in India have a higher debt-to-GDP ratio than Bihar. Bihar is the fifth most indebted state. By 2027-28, Bihar’s debt is expected to remain about 34.9 per cent of the GDP. If the government tries to fulfil all its election promises, the debt may rise even further.
Economists recall that, in 2024, Bihar hosted the Business Connect Summit and attracted Rs1.81 lakh crore in investment proposals, with players like the Adani group and Sun Petrochemicals stepping up. That is what a credible development strategy looks like – using incentives to attract private investment, rather than expanding an already strained public payroll. Clearly, he will need a strong helping hand from the Centre.