When I landed in Patna on November 6 to cast my vote, in the short drive to the polling booth, I asked my driver, Saroj, about the prevalent milieu. He ducked the question, instead repeating what his mother had told him: “Nitish has been with us for long, done whatever he could; just because he is old, should we forget him so quickly?”
This observation encapsulates Bihar’s complex ethos; shaped by nostalgia, loyalty, and memory. In rural Bihar, relationships often replace markets and trust substitutes contracts. Scarcity breeds solidarity, not revolt.
People share labour, exchange services, and rely on moral reciprocity more than monetary exchange. The revered Chhath Puja is a festival of gratitude, not consumption. The 2025 election outcome reaffirms this moral rubric.
Abusing the Prime Minister’s mother and making disparaging remarks on Nitish’s infirmities were inconsistent with the Bihari ethos. Voters preferred development over drama. The combined focus of the Centre and the state on vastly improved infrastructure, connectivity and direct benefit transfers resulted in a stronger economy than in decades.
GSDP grew by 9.2 per cent in 2023-24 and the economy has more than tripled since 2011. Roads reach almost every village and electricity is available in all districts. Yet, per capita income remains one-third of the national average and open unemployment of 3.9 per cent hides seasonal and disguised unemployment.
Nearly half the workforce remains in agriculture, while nearly one million young Biharis enter the labour force annually. The outward push is often to improve job quality and enhance incomes, with assured remittances. Almost one crore Biharis live in other states, and more than 73,000 went abroad in 2023. Remittances sustain more than half of Bihar’s households. Enhanced social benefits and direct transfers often make migration a choice, not a compulsion.
So what should Bihar’s ambition be over the next five years?
First, both services and industry must drive this transition. Services already account for about 58 per cent of GSDP, while industry contributes 21.5 per cent. The Bihar Industrial Investment Promotion Package 2025 and the single-window clearance system provide a framework, but implementation must be predictable.
The land-bank initiative under BIADA must be backed by timelines and facilitation. Bihar should raise the combined share of services and industry in GSDP by a quarter by 2030 through food processing, textiles, ethanol, renewable energy clusters, IT-enabled services, and tourism acting as a catalyst.
A Bihar Investment Commission must anchor major projects and coordinate departmental silos. Ministerial groups on investment should catalyse proposals.
Second, despite improvements in infrastructure, its quality and reliability remain uneven. Per capita electricity consumption is among the lowest in India.
With capital outlay at 3.7 per cent of GSDP, continued investment in power, logistics, roads, and digital networks is essential. The Eastern Freight Corridor, new airports, and expanded waterways can deepen integration with national supply chains.
Third, agriculture must shift from subsistence to diversification. The Fourth Agriculture Roadmap focuses on irrigation expansion, soil health, and promoting pulses, oilseeds, and millets.
Dairy, poultry, and fisheries already provide one-third of agricultural output. Equally, agro-processing of maize, makhana, and litchi creates agro-employment.
Fourth, human capital remains Bihar’s greatest opportunity. Literacy stands at about 74.3 percent, with female literacy at 66.1 per cent. Despite one-fifth of the budget being allocated to education, outcomes must improve. ASER 2024 shows only 39.4 per cent of Class III children can read a Class II level text, and just 19.5 per cent can do division.
A Skill Development Mission in each district with a target of training five lakh youth can translate into opportunities in manufacturing, logistics, hospitality, and services. Each district with an Employment and Skills Council can align training with sectoral demand and seasonal unemployment patterns.
Fifth, urbanisation must be innovative in a state of adverse land-to-man ratio. Only 11 per cent of Bihar lives in towns. JNNURM improved access but also led to fragmented peri-urban growth.
The next phase requires statutory plans for Patna, Muzaffarpur, and Bhagalpur. BUIDCo, originally established to implement major World Bank-supported urban programmes, must be upgraded into a Bihar Urban Mission with a broader mandate for orderly urbanisation.
Sixth, strengthening the third tier is essential. Panchayats and municipalities remain constrained. Empowering them requires the three Fs: Functions, Finances, and Functionaries. Property tax collections remain far below potential. Financing of the third tier must be
improved through predictable grants, enhanced own-source revenue, and audited accounts.
To begin with, can half a dozen municipalities become sustainable enough to qualify for market borrowings?
Seventh, tourism and hospitality can generate rapid employment. Bihar’s heritage remains under-leveraged. Land availability is now improved for hotels through dedicated tourism land banks and streamlined allotments. Patna and Bodh Gaya must work toward establishing at least 50 well-managed hotels, including PPP-based ones.
The employment coefficient of the hospitality sector, with its multiplier effects on transport, food services, handicrafts, and supply chains, has few parallels. Hospitality requires skilled workers, predictable licensing, and coordinated support.
Eighth, institutional reform must sustain growth. A high-level committee on private investment must actively seek private capital. Ongoing economic reforms have catalysed private investment elsewhere in India. Bihar must replicate this. Senior officers must be assigned explicit targets for private-sector investments.
Ninth, Bihar must deepen its absorptive capacity for capital outlays. While allocations have increased, several departments continue to surrender unspent funds, which reflects faults in planning, procurement, and execution.
A Committee on Public Expenditure Outcomes should monitor major schemes, track progress, and resolve bottlenecks. Annual procurement plans, standardised bidding documents, and stronger technical oversight could raise the productivity of capital spending.
Fiscal realism must guide reform. Bihar’s 2025-26 Budget Estimates place own tax revenue at 5.4 per cent of GSDP. With nominal GSDP projected to grow by 22 per cent, tax buoyancy must improve.
Finally, the surge of women voters represents their comfort and security, coupled with assured livelihoods, an ethos that can be empowering, predictable and trustworthy.
The symmetry of governance between Prime Minister Narendra Modi’s leadership and Nitish Kumar’s trust, called “NiMo”, holds great potential.
Bihar’s social fabric, while aspirational, does not forego gratitude. It is a shining example of what Modi calls “Team India” — fiscal federalism at its best. The yearning expressed by millions during Chhath for dignity, opportunity, and hope must guide this journey. The people have spoken. Ending on a lighter note, God helps those who help themselves. This is Bihar’s time.
The writer is former chairman, 15th Finance Commission
