(This piece was originally published on Quint Hindi on 25 July. It has been translated to English. Read the piece in Hindi here.)
Just ahead of the Bihar elections, Chief Minister Nitish Kumar has announced a flurry of populist schemes. In the past month alone, he has made nearly half a dozen announcements, each of which is expected to put a significant financial strain on the state treasury.
Among these, the most recent is the promise of 125 units of free electricity per household per month. Compared to his other announcements, this one has received more attention, largely due to Nitish Kumar’s past statements criticising the Aam Aadmi Party government in Delhi and other state governments for offering free electricity to the public.
Interestingly, when news began circulating in the media about the government's intention to provide free electricity and the finance department's approval of the plan, the latter issued a press note stating that no such proposal had been agreed upon.
In a press release issued on 13 July, the finance department clarified: "Certain media outlets are reporting that the finance department has approved a proposal to provide 100 units of free electricity per month. We would like to clarify that no such approval has been given by the department, and no decision has been made in this regard. The claim that the finance department has approved such a proposal appears misleading and factually incorrect."
Just three days after this denial, the Chief Minister announced that all domestic consumers in Bihar would receive 125 units of electricity per month for free. He posted on his social media handle that the move would benefit 16.7 million families.
Announcements Made Under Pressure?
Before the free electricity announcement, on 21 June, Nitish Kumar increased the pension under the social security scheme from Rs 400 to Rs 1,100 per month for 11.1 million beneficiaries. He also announced that from 2025 to 2030, the Bihar government would provide jobs and employment to 10 million youth.
In addition, the Chief Minister launched the Mukhyamantri Kalakar Pension Yojana (an artist pension scheme) to provide financially weaker artists with a monthly pension of Rs 3,000. He also announced internship stipends of Rs 4,000 for 12th-pass youth, Rs 5,000 for ITI or diploma holders, and Rs 6,000 for graduates and postgraduates.
Notably, two of these announcements—free electricity and pension hike—had already been promised by Rashtriya Janata Dal (RJD) leader Tejashwi Yadav, an INDIA alliance partner, roughly six to seven months ago.
In December 2024, Yadav had promised that if his government came to power, 200 units of free electricity per household per month would be provided. He had also pledged to raise the social security and old-age pension from Rs 400 to Rs 1,500.
Tejashwi Yadav termed Nitish Kumar’s announcements as signs of “election panic.” In a press conference, he said the NDA government increased pensions due to fear of defeat.
"They have neither vision nor original ideas. We had already demanded that these promises be included in the budget proposal, but the government ignored us for fear that Tejashwi would get the credit."Tejashwi Yadav
On the free electricity announcement, Tejashwi said, "They promised 200 units free—now the copycat government has copied it. They have no roadmap or vision of their own."
‘Govt is Stealing the Opposition’s Thunder’
Political analyst Mahendra Suman notes that these decisions were made in response to the Opposition‘s promises.
"It’s true that the Mahagathbandhan, especially Tejashwi Yadav, has been repeatedly promising things like pension hikes, free electricity, and jobs. Now the government has gone ahead and announced them. Clearly, the government is stealing the Opposition’s issues. This is the advantage of being in power—if a promise by the Opposition becomes popular among the masses, the government can announce it and take credit before elections."Mahendra Suman
Tejashwi Yadav is also promising to introduce a Mai-Bahin Samman Yojana in Bihar—similar to schemes in other states—that would provide Rs 2,500 monthly financial assistance to women.
Notably, just before elections, similar welfare schemes were implemented in Maharashtra, Jharkhand, Madhya Pradesh, and West Bengal—and helped the incumbent governments get re-elected.
In Maharashtra, Finance Minister Ajit Pawar announced a scheme providing Rs 1,500 per month to women under the Ladki Bahin Yojana. In Jharkhand, the Jharkhand Mukti Morcha-Congress-RJD government launched the Mukhyamantri Maiya Samman Yojana, offering Rs 1,000 per month to women aged 21-49, later increased to Rs 2,500.
In Madhya Pradesh, the then Chief Minister Shivraj Singh Chouhan announced the Ladli Behna Scheme, offering Rs 1,250 per month to women. Similarly, ahead of the 2021 West Bengal elections, the Trinamool Congress government launched the Lakshmi Bhandar Scheme, offering Rs 1,500 per month to women.
"I think the Nitish government may soon announce a similar financial aid scheme for women."Mahendra Suman
The Opposition has also promised 100 percent domicile-based reservation in government jobs. Discussions are ongoing that the government might act on this too. Recently, the government announced 35 percent reservation for local women in government jobs.
How Much Will This Burden the State Treasury?
Nitish Kumar has stated that the 125 units of free electricity would benefit 16.7 million households. According to the 2022–2023 caste survey, Bihar has 27.66 million households—of which 9.442 million earn Rs 6,000 or less per month, and 8.191 million earn between Rs 6,000 and Rs 10,000.
Clearly, a large population will benefit economically from this announcement. But it will also increase the financial burden on the government and further strain public electricity companies.
Bihar has two public electricity distribution companies—NBPDCL (North Bihar Power Distribution Company Ltd) and SBPDCL (South Bihar Power Distribution Company Ltd). From 31 March 2019 to 31 March 2023, these two companies suffered combined losses of Rs 82,950 crore. Providing 125 free units to 16.7 million families will increase the annual financial burden by Rs 4,500 crore.
Similarly, increasing the pension amount will raise government expenditure. Currently, the Bihar government spends Rs 5,328 crore annually to pay Rs 400 per month to 11.1 million people. Raising the pension to Rs 1,100 means the government will now spend Rs 9,324 crore annually.
Moreover, the promise to provide government jobs or employment to 10 million youth over the next five years will also require massive funding.
Economists warn that this will significantly strain Bihar’s finances.
The government doesn’t have sufficient revenue sources, but its expenses are increasing. To fund these, the Bihar government will need to take loans—leading to more debt.Naval Kishore Chaudhary
Recently, the government appointed a large number of teachers and regularised many contractual ones, adding to salary obligations. Chaudhary said, "This growing financial burden is unhealthy for the state's economy and will impact development work. We’re already seeing signs—like grants to affiliated colleges being stopped. There’s a trend of competitive populism across the country, which is pushing Nitish Kumar into such announcements — but economic rationality is its casualty. These kinds of schemes go against good fiscal health."
Is the Financial Burden Really Unmanageable?
Some experts disagree with the view that these expenses are unaffordable.
"Whenever something is proposed for the underprivileged, people start asking about the financial burden. But I believe increasing pensions and offering free electricity should have happened much earlier. It’s a late but correct decision. Poor people deserve cheap electricity and dignified pensions—it’s not a huge ask."DM Diwakar, economist
On the question of financial pressure, he added, "The government has no shortage of resources. It can defer heavy infrastructure spending. It must prioritise—delay non-essential construction. Rationalise electrification spending. Lower rural electricity rates and increase urban ones. Recover funds from the private education and healthcare sectors. There are many untapped revenue streams."
Is This Due to Anti-Incumbency?
Observers see Nitish Kumar’s announcements in two ways. First, they may be an attempt to tackle growing public anger against the government. Second, they may be influenced by pressure from the Bharatiya Janata Party (BJP) allies.
This perception stems partly from Nitish’s earlier stand. He had once fiercely criticised Delhi CM Arvind Kejriwal’s 200-unit free electricity promise, arguing it would damage a state’s financial health.
“The free electricity announcement doesn’t seem like a typical Nitish Kumar decision. He doesn’t usually act emotionally—he’s known for rational governance. If it were truly his initiative, he would’ve excluded the rich and targeted only the needy.”Mahendra Suman
Economist Naval Kishore Chaudhary added, "The NDA has ruled Bihar for 20 years. Nitish Kumar’s USP used to be good governance, but it has weakened recently, creating anger among the people. These announcements are aimed at countering that."
"With Opposition parties making populist promises, Nitish Kumar is compelled to match them. After all, he has to retain power too."Economist Naval Kishore Chaudhary
DM Diwakar echoed this, saying, "These are efforts to counter anti-incumbency, but such gestures may not be enough to quell public anger."
(This piece has been translated to English by Baibhabi Hazra.)
(Umesh Kumar Ray is an independent contributor. This is an opinion piece, and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)