Bihar Budget 2025-26: A Pre-Election Push for Growth and Stability
Dr. Sudhanshu Kumar
As Bihar gears up for impending elections, the 2025-26 budget, presented by Finance Minister Samrat Chaudhary, reflects Chief Minister Nitish Kumar’s strategy to consolidate his government’s priorities. Over the past two decades, Bihar’s budget has expanded significantly, yet the state has maintained fiscal discipline. This year’s Rs 3.17 lakh crore budget keeps the fiscal deficit at 2.98% of the Gross State Domestic Product (GSDP), balancing financial prudence with an increase in developmental expenditure.
The government has raised scheme expenditure by approximately 17%, while establishment and committed expenditure have increased by about 11%. With rising demands for salaries and pensions, the allocation of Rs 81,000 crore for new appointments and salary of existing employees, and Rs 33,000 crore for pensions, ensures that the state meets its obligations. Capital expenditure has been set at 20.5% of the total budget, a move that aligns with the central government’s broader economic framework and enhances Bihar’s capacity to develop crucial infrastructure.
A noteworthy feature of this budget is its focus on women, youth, and farmers, along with improvements in health, roads, and electricity. Women’s empowerment has been given a significant boost with employment schemes, including 33% reservation in State Road Transport Corporation jobs and the introduction of Pink Bus services exclusively for women. The government has also announced hostels in major cities to ensure safety and a conducive working environment for women.
In the healthcare sector, the state is set to encourage private investment alongside government funding. A public-private partnership (PPP) model is expected to enhance the quality of medical facilities, expand pharmaceutical production, and promote research. Additionally, environmental sustainability has been addressed with increased funds for air quality improvement measures.
Infrastructure development remains a crucial aspect of this budget. The government’s emphasis on air travel signals a push towards modernizing Bihar’s transport network. The upcoming operationalization of Purnia airport within three months and the proposed greenfield airports at different places in the state mark a significant step toward improving connectivity.
Given that this is an election year, the budget appears both strategic and ambitious. It aims to accelerate economic development while addressing long-standing issues in governance. However, the real test lies in the execution. If the government follows through on these promises, the impact could be transformative. In the coming months, it will be crucial to see how efficiently these policies are implemented and whether they translate into tangible benefits for the people of Bihar.
(The author is Associate Professor of Economics)
