By Ashok Gulati and Bidisha Chanda, respectively, Distinguished Professor and Research Assistant at ICRIER
The National Democratic Alliance (NDA)undoubtedly deserves praise for their overwhelming win in Bihar. Nitish Kumar is poised for a 25-year tenure. It's a significant accomplishment in India's highly competitive political landscape, and it was refreshing to witness the NDA's effort to change the state's electoral approach from M-Y—the traditional religion-caste dichotomy—to a new model of M-Y: mahila (women) and youth. But once the festivities subside, a more crucial question arises: How can Bihar move up in the states' economic hierarchy? Kumar's past two decades have not managed to elevate it. However, Prime MinisterNarendra ModiReiterated in his Ramnath Goenka Lecture, he emphasizes "vikas, vikaas, and only vikas." If progress continues to be the main priority for the next five years, Bihar could experience significant transformation.
Over the past two decades, Bihar's situation has definitely improved, with electricity being available in households, highways connecting different districts, and a slight improvement in law and order. Building upon this base, the election manifesto promised familiar elements—a push tosmall, medium, and large enterprises, industrial zones, highways, training centers, and other essential elements, all crucial if Bihar aims to transition from mere survival to a more robust and dynamic growth narrative.
However, the key initiative remained the Mukhyamantri Mahila Rojgar Yojana, which is credited with strengthening the support base of women voters. It initially involved transferring Rs 10,000 to 75 lakh women in Jeevika self-help groups; now, this figure has increased to 1.5 crore. In financial terms, the budget has already reached Rs 15,000 crore, and enrollment is still open until December. Interestingly, the NDA has pledged support of up to Rs 2 lakh after a six-month evaluation. It remains unclear whether this will be a grant, a low-interest loan, or a combination. But one must consider seriously: What kind of livelihood can a woman build with a one-time payment of Rs 10,000? Isn't it merely a form of charity? Such handouts cannot replace a sustainable income system.
If Bihar genuinely aims to transform vikas into more than just a political slogan, the youth must be central to the plan. However, the 15-29 age group has a labor force participation rate of 34.6%, significantly lower than India's 46.5% (Periodic Labour Force Survey, 2023-24). For this group, the government has pledged one crore government jobs. Even with a modest monthly salary of Rs 15,000-20,000, the annual cost would amount to Rs 1.8-2.4 lakh crore, which is more than half of the state’s total budget of Rs 3.17 lakh crore. Thus, the promise appears to be unrealistic.
The Bihar Business Connect 2024 generated investment proposals worth Rs 1.81 lakh crore, with participants such as Adani Group and Sun Petrochemicals coming forward. This is how a reliable development strategy should look—offering incentives to attract private investment instead of increasing an overburdened public payroll. Kumar should be commended for creating the foundation, but investors require consistent confidence, not excessive fiscal measures. Indeed, the Industrial Investment Promotion Package 2025 takes a positive step, providing employment-linked incentives like Rs 5,000 per employee per month for the textile sector—with up to 300% Employees’ State Insurance (ESI)/Employees’Provident Fund (EPF) assistance—and Rs 2,000 for other departments (with full ESI/EPF coverage). This is essentially the employment approach the state should have been promoting, rather than the financially unsustainable "one crore government positions".
Interestingly, the Prime Minister, while expressing gratitude to party workers for the win, mentioned that just as the Ganga flows from Bihar to Bengal, this wave of victory will also travel in the same direction. West Bengal is scheduled to hold elections in March-April 2026, and the Bharatiya Janata Party (BJP) is already preparing for a tough contest against Mamata Banerjee. Will the BJP adopt the Bihar model, offering Rs 10,000 or more to every woman in a household? Would such a promise be effective? To find out, one needs to contrast Kumar's period in office with Banerjee's.
From 2011-12 to 2024-25, West Bengal's average annual GDP growth stood at 4.8%, whereas Bihar recorded a growth rate of 6.5%. In the agricultural sector, West Bengal grew at 2.9% compared to Bihar's 4%. On the surface, Bihar appears to be performing better. However, the development narrative changes significantly when examining poverty levels. West Bengal's multidimensional poverty decreased from 58% in 2005-06 to 8.6% in 2022-23, representing an impressive 85% decline. Meanwhile, Bihar's poverty rate dropped from 78% to 27%, a reduction of 65%. Even though West Bengal had a slower growth rate, it managed to lift a much larger number of people out of poverty. What accounts for this difference?
The reason can be found in its demographic trends. West Bengal's population is increasing by 0.5% each year, whereas India's growth rate is 0.9%, and Bihar's stands at 1.43%. Bihar has a fertility rate of 3, compared to 2 for India, and 1.6 for West Bengal. This clarifies why, despite having a quicker rising GDP, Bihar's per capita income continues to be the lowest.
Another factor is the diversification and intensification of agriculture. Both states have a significant number of small landholdings: 54% of Bihar's workforce is involved in agriculture, with an average landholding size of only 0.39 hectares (ha). In West Bengal, agriculture employs 38% of the workforce, with an average holding size of 0.76 ha (Agriculture Census, 2015-16). Moreover, its cropping intensity is 193%, the second-highest in the country, while in Bihar it is 148%. Almost 18% of West Bengal's total cropped area is dedicated to high-value horticulture, compared to just 7% in Bihar. Fisheries also provide West Bengal an advantage, contributing 15% to the total agri-output value, whereas in Bihar, it contributes 8%.
In this scenario, can the BJP capture Bengal's stronghold through increased subsidies, or will it present a more impactful growth plan? Only the future will reveal.