After cash, why Bihar’s women need long-term plan from Nitish Kumar

According to a June 2025 paper by Sunaina Kumar, Senior Fellow, at the Observer Research Foundation, even small targeted and unconditional cash transfers to women protect them from shocks such as diseases and help better the well-being of their household, improve food security, contribute to the education of children, and promote savings. All in all, women are empowered.

“On its own, however, targeted basic income cannot lift women and families out of poverty. For the country to achieve inclusive growth and sustained poverty reduction, cash transfers must be complemented with sustained investments in robust social protection systems and expanded access to employment, education, and skills development – particularly for women,” Kumar wrote.

Women and work in Bihar

While the Mukhyamantri Mahila Rojgar Yojana intends to improve employment opportunities for women, just handing out a few thousand rupees is not going to achieve the objective, given the current dire situation.

As per the latest data from the Ministry of Statistics and Programme Implementation (MoSPI) for July-September 2025, the Labour Force Participation Rate (LFPR) for young women in Bihar was a lowly 8.8 per cent – not just far below the all-India average of 21.4 per cent but also the lowest in the country. The next lowest is Uttar Pradesh at 11.2 per cent, with Himachal Pradesh the highest at 44 per cent.

The situation is hardly better if one considers all females aged 15 years and above. Yes, Bihar’s female LFPR does rise considerably to 20.6 per cent, but it remains one of the lowest in the country and well below the all-India rate of 33.7 per cent.

This was just women looking for jobs. What about those who do find work, what do they do? More than three-fourths, or 77.8 per cent, of employed women in Bihar aged 15 years and above worked in the agriculture sector in July-September 2025, significantly higher than the all-India average of 59.1 per cent. Meanwhile, 7.3 per cent work in the secondary sector, including mining and quarrying, and 14.9 per cent in the tertiary, or services sector. Both these figures are almost half the all-India averages: 14.6 per cent for the secondary sector and 26.3 per cent for services. The dominance of agriculture for female employment in Bihar is visible in both rural and urban areas.

But surely some employment is better than nothing? Yes. But the problem is that even with such a low LFPR, women in Bihar have rather high unemployment rates. For young women, the unemployment rate is 20.7 per cent, higher than the national average of 17 per cent. But in urban areas, the female unemployment among young women of Bihar was as high as 52.3 per cent – more than double the all-India rate. Only Rajasthan, at 53.2 per cent, had a higher urban youth unemployment rate for women.

Who is creating jobs?

Industry is required to generate jobs. In 2023-24, Bihar had just 3,386 factories, as per the latest Annual Survey of Industries. This was just 1.3 per cent of all factories in the country. And of the total number of workers employed by the Indian industry, the country’s third-most populous state housed just 1.17 lakh, or 0.75 per cent.

If not industry, what about services, the sector that has powered the rest of the country? Well, it has shrunk in Bihar. According to MoSPI data, the net value added by Bihar’s services sector reduced as a percentage of the total net state value added to 54.8 per cent in 2024-25 from 61.2 per cent in 2019-20. The share of the secondary sector (manufacturing, construction, and utilities), meanwhile, rose from 19.2 per cent to 26.6 per cent, while the primary sector (agriculture and mining) remained broadly steady around the 19-20 per cent mark.

Cash transfers to women are not going to reverse the industry and services sector, making it imperative that the fiscal sacrifice of these transfers is not in vain. And there has been a massive sacrifice.

Bihar’s fiscal illusion

States must keep their annual fiscal deficit within 3 per cent of their Gross State Domestic Product. Bihar promised to do so in its Budget for 2024-25. But the revised estimate was an eye-watering 9.2 per cent.

Bihar has promised a fiscal deficit of 3 per cent again in 2025-26. How? By assuming that it’s GSDP – or, its economy – will grow by a massive 22 per cent this year without adjusting for inflation.

It’s worth putting this 22 per cent growth assumption in perspective: Bihar’s economy has never grown by 22 per cent as per the current GDP series. In fact, the highest growth rate of any state in 2024-25 was Tamil Nadu with 14 per cent. Bihar’s GSDP growth has averaged 14.5 per cent over the three years starting 2021-22. Data for 2025-26 is unavailable.

Whatever the growth rate, it will be a tall task for Bihar to achieve its fiscal deficit target. In the first half of 2025-26, the deficit was already Rs 85,814 crore compared to the full-year target of Rs 32,718 crore.