New Delhi: The Narendra Modi government ensured that the political optics of the budget wasn’t lost in the Union finance minister’s nearly two-hour-long budget speech.
Even as Nirmala Sitharaman announced relief measures for the middle class by slashing income tax slabs and anchoring her budget in a range of proposed initiatives to boost household consumption and export-driven employment, she marked out, and even emphasised, the special outlay for poll-bound Bihar.
She announced a Makhana board, a food processing institute, a greenfield airport near Patna, capacity expansion of the current Patna airport and IIT Patna and, more importantly, financial support for the Western Koshi Canal project for the flood-prone Mithilanchal region of Bihar.
Much on the lines of her July 2024 budget, where she announced a slew of measures to support Andhra Pradesh, Sitharaman directed her attention to Bihar, where assembly elections are scheduled for later this year.
As much as such proposals are election sops, it can’t be denied that both Nitish Kumar and N. Chandrababu Naidu have kept the BJP and the Modi government on tenterhooks.
Both the socialist leaders – also known for their capriciousness – have shown that they are with the National Democratic Alliance (NDA) strictly on a give-and-take principle and resultantly hammer down the fact that the BJP is short of a majority in the Lok Sabha each time the prime minister has attempted to project himself as a one-man show.
In July 2024, soon after Modi formed his third successive government, Sitharaman’s budget announced an outlay of Rs 15,000 crore for the development of Amravati, Andhra Pradesh’s proposed capital city.
She also said it was committed to financing the much-delayed Polavaram irrigation project in Andhra Pradesh, also one of Naidu’s prestige issues, in addition to announcing a backward region grant for three districts of the state.
Back then, something that had gone unnoticed because of her emphasis on Andhra Pradesh is that Sitharaman had also announced an outlay of Rs 26,000 crore for road and other infrastructure projects in Bihar.
This time around, she focussed her attention on Bihar, especially when Nitish’s Janata Dal (United) MPs gave their critical feedback on the proposed implementation of the Uniform Civil Code and University Guidelines Commission’s draft regulations.
Also read: For Farmers, Women, the Poor and the Youth, Budget 2025-26 Offers Only Symbolic Changes
Both Nitish and Sitharaman needed to contain the criticism that their coalition government has been receiving ahead of the elections for a range of reasons. Yet, the Modi government has been forced to follow coalition dharma. Nitish and Naidu have ensured that they keep doing that, unlike in Modi’s last two terms, when he had a brute majority on his own in the Lok Sabha.
However, economist and former director of the Patna-based A.N. Sinha Institute of Social Studies, D.M. Diwakar, believes that the budget announcements for Bihar, especially when the two NDA parties are looking to score a win in the upcoming assembly polls, are too little for any fundamental changes to the state’s economy.
“Eighty-eight percent of the state’s population lives in villages. The budget, instead of making these cosmetic announcements, should have done something to infuse energy in its rural economy. The budget announcements do not even come close to the latest agricultural road map of the Bihar government that has recommended an investment of Rs 1.5 lakh crore in its rural economy,” Diwakar told The Wire.
He said that according to Bihar’s caste survey, nearly 40 lakh people live in kutcha houses or are homeless.
“How will such announcements benefit them? The government’s priorities regarding Bihar are misplaced,” he said.
He added that a closer look at the budget documents show that Bihar may get a lower share in the devolution of taxes, and that will have a much bigger impact on the state.
“The new finance commission’s recommendations will lead to at least a 1% lower share in tax devolution for Bihar,” he said.
“Moreover, look at the figures. Real allocation for overall rural development has come down by around 4.6%. Subsidy allocations for fertilisers have been reduced by Rs 3,500 crore. The same for food and petroleum have come down by Rs 1,830 crore and Rs 2,600 crore respectively.
“Given the fact that Bihar is primarily a rural state, such measures will impact the state greatly, even as those may impact other parts of India, too,” he said.
The Modi government has given some relief to the middle classes, who had been complaining about high income tax rates and the steep rise in the prices of essential commodities.
That the slashing of income tax slabs has come days before the Delhi assembly polls appears to be a politically motivated move, too.
However, this may have come at the cost of the necessary boost that rural development needed at the moment.
