By Ashok Gulati & Bidisha Chanda, Respectively, Distinguished Professor and Research Assistant at ICRIER
The National Democratic Alliance (NDA) surely deserves compliments for their landslide victory in Bihar. Nitish Kumar is all set for a 25-year innings. It is no trivial achievement in India’s extremely competitive politics, and it was refreshing to see the NDA’s attempt to shift the state’s electoral grammar from M-Y—the old religion-caste binary—to a new formulation of M-Y: mahila (women) and youth. But once the celebrations fade, a more fundamental question needs to be asked: How can Bihar climb up the rankings in the states’ economic pyramid? Kumar’s last 20 years have failed to lift it. However, Prime Minister Narendra Modi echoed in his Ramnath Goenka Lecture that he believes in “vikas, vikaas, aur sirf vikas”. If development remains the focus for the next five years, Bihar can witness a notable change.
In the last two decades, Bihar’s baseline has surely changed, with electricity reaching homes, highways stitching districts, and law and order improving somewhat. Building on that foundation, the election manifesto promised familiar things—a boost to micro, small, and medium enterprises, industrial parks, expressways, skill centres, etc., all necessary ingredients if Bihar hopes to move from subsisting to becoming a more resilient and vibrant growth story.
But the trump card remained the Mukhyamantri Mahila Rojgar Yojana, credited with consolidating the women’s vote bank. It began with a simple Rs 10,000 transfer to 75 lakh women in Jeevika self-help groups; today that number stands at 1.5 crore. In fiscal terms, the outlay already touches Rs 15,000 crore, and enrolments are open till December. Intriguingly, the NDA has promised assistance of up to Rs 2 lakh after a six-month assessment. Whether this is a grant, soft loan, or a hybrid is unclear; but one must ask with some seriousness: What sort of livelihood can a woman make with a one-time transfer of Rs 10,000? Isn’t it just a dole? Such doles cannot substitute a viable income model.
If Bihar truly wants to turn vikas into something more than an electoral refrain, its youth must be at the core of the strategy. Yet, the 15-29 age group has a labour force participation rate of 34.6%, far below India’s 46.5% (Periodic Labour Force Survey, 2023-24). For such a cohort, the government has promised one crore government jobs. Even at a modest salary of Rs 15,000-20,000 a month, the annual bill for this would be Rs 1.8-2.4 lakh crore against the state’s total budget of Rs 3.17 lakh crore. So the promise seems to be wishful thinking.
The Bihar Business Connect 2024 attracted Rs 1.81 lakh crore in investment proposals with players like Adani Group and Sun Petrochemicals stepping forward. That is what a credible development strategy looks like—using incentives to crowd in private investment rather than expanding a strained public payroll. Kumar deserves credit for setting the stage, but investors need sustained confidence, not fiscal overreach. In fact, the Industrial Investment Promotion Package 2025 nods in the right direction, offering employment-linked incentives such as Rs 5,000 per employee per month for textiles—with up to 300% Employees’ State Insurance (ESI)/Employees’ Provident Fund (EPF) support—and Rs 2,000 for other units (with 100% ESI/EPF support). This is essentially the job strategy the state should have been advertising, not the fiscally untenable “one crore government jobs”.
Interestingly, the PM, while thanking party workers for the victory, said that just as the Ganga flows from Bihar to Bengal, this victory wave will also move in the same direction. West Bengal is slated to go to polls in March-April 2026, and the Bharatiya Janata Party (BJP) is already gearing up to fight a fierce battle to defeat Mamata Banerjee. Will the BJP follow the Bihar model, promising Rs 10,000 or more to a woman in every family? Will such a promise work? To answer this, one must compare Kumar’s tenure with Banerjee’s.
Between 2011-12 and 2024-25, West Bengal’s average annual GDP growth was 4.8%, while Bihar posted a growth of 6.5%. In agriculture, West Bengal grew at 2.9% versus Bihar’s 4%. On paper, Bihar looks like a stronger performer. Yet the development story diverges sharply when viewed through the lens of poverty. West Bengal’s multidimensional poverty fell from 58% in 2005-06 to 8.6% in 2022-23, a whopping 85% drop. But Bihar’s poverty moved from 78% to 27%, dropping 65%. Despite slower growth, West Bengal lifted far more people out of deprivation. What explains this divergence?
The answer lies in its demographics. West Bengal’s population is growing at 0.5% per annum, compared to India’s 0.9% and Bihar’s 1.43%. Bihar’s fertility rate is 3 compared to India’s 2, and West Bengal’s 1.6. This explains why even with a faster growing GDP, Bihar’s per capita income remained at the bottom.
Another reason is agricultural diversification and intensification. Both states are dominated by small landholdings: 54% of Bihar’s workforce is engaged in agriculture, with an average holding size of just 0.39 hectares (ha). Agriculture engages only 38% of the workforce in West Bengal, with an average holding size of 0.76 ha (Agriculture Census, 2015-16). Further, its cropping intensity stands at 193%, the second-highest in India, while in Bihar it remains at 148%. Nearly 18% of West Bengal’s gross cropped area is under high-value horticulture against Bihar’s 7%. Fishery also gives West Bengal an edge as it accounts for 15% of gross value for agri-output, while in Bihar its contribution is 8%.
In that context, can the BJP storm Bengal’s fort with higher doles, or will it sell a more meaningful development strategy? Only time will tell.
