Patna: With the Union Budget set to be presented on February 1, Bihar has high expectations, particularly as the Nitish Kumar-led JD(U) remains an ally of the Modi government at the Centre. Given that the state assembly elections are due later this year, Bihar is seeking significant financial allocations to boost development and infrastructure.
Dr Sudhanshu Kumar, Associate Professor and Economist at the Bihar Institute of Public Finance and Policy, highlighted key areas where Bihar could benefit from the budget:
- The Centre’s emphasis on solar energy could lead to a major announcement for Bihar in this sector, aligning with the state’s recent initiatives.
- With rapid urban population growth, Bihar could see new urban development schemes to address infrastructure needs.
- Bihar generates only 28% of its revenue, relying heavily on central tax devolution. The 16th Finance Commission’s recommendations will play a crucial role in shaping future financial support.
- Given that a large portion of Bihar’s population depends on agriculture, there is hope for new rural and agricultural schemes in the budget.
Bihar’s Key Budget Demands
The Nitish Kumar government has submitted a 32-page demand proposal, requesting a Rs 1.5 lakh crore allocation from the Centre. The key demands include:
- Greenfield Cities & Infrastructure
Bihar has sought funding for the development of 10 greenfield cities, including Patna, which will emphasize modern urban planning with a focus on sustainability and greenery.
- Indo-Nepal High Dam for Flood Control
To tackle annual floods affecting North Bihar, the state has demanded the construction of a high dam in collaboration with Nepal, along with Rs 13,000 crore for flood control, drainage, and bridge construction across 26 districts. The proposed dam would help manage the Gandak, Kosi, and Kamla rivers, significantly reducing flood damage.
- Boost for Farmers & Agriculture
Bihar’s Agriculture Minister Mangal Pandey has indicated that special provisions for farmers are likely in the budget. Union Agriculture Minister Shivraj Singh Chouhan has assured additional assistance for Bihar’s farmers.
- Increased Financial Support & Loan Exemptions
Bihar has requested an additional loan from the Centre and exemptions until its per capita income matches the national average.
- Share in Cess & Surcharge Revenue
The state has urged the Centre to redistribute cess and surcharge revenue among states. The share of cess and surcharge in total tax revenue has risen from 10.04% in 2011-12 to 15.3% today, impacting states’ financial autonomy. Bihar argues that the excise duty on petrol and diesel has disproportionately increased—surcharge and cess on petrol have surged from 56% in 2017 to 95% today, and on diesel from 35% to 95%.
What to Expect?
With state elections approaching, the Centre is likely to focus on Bihar’s development needs, particularly in urban infrastructure, rural welfare, and flood control. However, much of Bihar’s long-term financial expectations may depend on the 16th Finance Commission’s recommendations, rather than the immediate budget allocation.
