November 10, 2025 06:53 AM IST First published on: Nov 10, 2025 at 06:53 AM ISTThe electoral battle for Bihar is in full swing. Contesting parties have promised the moon for the state’s 130 million people — the second most populous in India. The main Opposition bloc, the Mahagathbandhan, has made the most promises. It promises “one job per family within 20 days of government formation, with job process to begin within 20 months”. Bihar has 2.97 crore families. Even at Rs 15,000-20,000 per month, the total expenditure on the schemes would be Rs 5.35 to Rs 7.13 lakh crore annually. Bihar’s 2025-26 budget is Rs 3.17 lakh crore. This simple arithmetic proves the hollowness in the Mahagatbandhan’s thinking. The manifesto also promises Rs 5 lakh “interest-free cash transfers” for five years, procurement guarantees for crops, and 200 units of free electricity. Clearly, Bihar’s political bazaar has very little room for fiscal prudence or even a basic understanding of budgetary finance.The NDA has been relatively conservative, even though they also seem to be caught in the optics of achche din. Its promise of “one crore jobs” and “one crore Lakhpati Didis” sounds ambitious. The recent transfer of Rs 10,000 to 75 lakh women under the Mukhyamantri Mahila Rojgar Yojana, right before the election season, seems more of a dole (revdi) than a well-thought-out strategy. Having said this, one must acknowledge that Nitish Kumar deserves credit: Restoring law and order in Bihar was no small feat, and stability is the bedrock of investment. Yet, bureaucratic efficiency is no substitute for political vision. Bihar’s development story will depend on the mobilisation of private capital and driving structural transformation — something this government, despite its relative orderliness, is yet to achieve.AdvertisementThe new entrant, Prashant Kishor’s Jan Suraaj, is perhaps the most rational – it has avoided revdis. But the reality is that for nearly 35 years, irrespective of who has held office, Bihar has remained at the bottom of India’s economic pyramid. In 1990-91, when Lalu Prasad came to power, as per MOSPI data, the state’s per capita income (PCI) was the lowest in the country at Rs 2,660 — 43 per cent of India’s average PCI of Rs 6,126. By 2005-06, when Nitish Kumar assumed office, Bihar’s PCI had risen to Rs 8,223, but it was just 28 per cent of the all India average of Rs 29,169. Two decades later, the story remains largely unchanged. In 2024-25, Bihar’s PCI stands at just Rs 69,321, barely 34 per cent of the national average of Rs 2,05,324 and only 18 per cent of that of Telangana’s, the state with the highest PCI.All this only underlines that a long history of doles has done little to pull Bihar out of the low-income trap. Of course, the state today boasts near-universal electrification and vastly improved road connectivity. The deeper malaise lies in how power and productivity are distributed. Agriculture, which still employs 54 per cent of the workforce (PLFS, 2023-24), consumes barely 4 per cent of the state’s total electricity (Agriculture Statistics, 2022-23). How can a sector expected to feed the state and drive its growth function on such meagre energy? Add to that, the average holding size of just 0.39 hectares (Agriculture Census, 2015-16), perhaps even smaller now, and the picture becomes bleaker. Can a family of nearly five (NFHS, 2019-21) realistically feed itself on such a small tract of land, especially when the population is growing faster than the national rate — 1.43 per cent vs 0.9 per cent?What could be the potential strategy levers to change Bihar’s economic fortunes? There are three clear pathways through which the state can still turn its potential into real prosperity. First, bet big on textile parks. After agriculture, textiles are the second-largest employer, and Bihar’s greatest strength is its cheap labour. Textile parks are low-capital, high-employment ventures — the best antidote to decades of palayan. Pearl Global, founded by Deepak Seth, has a garment factory in Bihar, which trains women to make apparel for export markets. It employs hundreds of women. At least 10 such factories are needed to take labour off agriculture and into more productive and resilient occupations with assured incomes. If the incoming government can help scale up such ventures by giving incentives, such as contributions to pension funds or some capital subsidy, it could pave the way for creating productive employment in the organised sector.AdvertisementThe second lever of Bihar’s growth lies in its livestock sector. The SUDHA cooperative is a quiet revolution: Milk’s share in agri-output has doubled from 14 per cent in the triennium ending (TE) 2002-03 to 28 per cent in TE 2022-23, with 76 per cent of the consumer rupee reaching farmers, far higher than is the case in crops. Poultry, too, is a growing sector: Between 2005-06 and 2022-23, egg and meat output grew 10.2 per cent and 4.7 per cent respectively. Yet, most comes from backyard units with limited scale. Bihar must attract large players like Venkateshwara and Suguna Hatcheries to build integrated value chains linking feed suppliers, farms, and processors, and bring in better breeds, technology, and assured markets.most readThe third lever for Bihar’s renewal lies in high-value crops like sugarcane, makhana, and litchi. The emerging bioethanol economy can anchor both farm profitability and industrialisation. Bihar’s Ethanol Production Promotion Policy is a good start, with 47 approved projects, but the state must expand beyond its 22 distilleries (8 molasses and 14 grain-based), revive defunct mills, and scale up to meet national Ethanol Blending targets. GI-tagged makhana and shahi litchi need a scale-up, and investments need to be made in processing to move beyond artisanal value chains. The focus should be on attracting private investors in processing and exports, while giving farmers interest-subvention credit for inputs, supported by proactive banking.Whichever government takes charge, one hopes it realises that Bihar does not need revdi economics. It needs dignified employment anchored in appropriate development strategies.Gulati is Distinguished Professor and Chanda a Research Assistant at ICRIER. Views are personal