The Finance Minister of India, Nirmala Sitaraman, presented the first full budget of Rs 50,65,347 crore on February 1. (Express Photo by Praveen Khanna)
Feb 4, 2025 12:41 IST First published on: Feb 4, 2025 at 12:41 IST
Written by D M Diwakar
The Union Budget is not only an account of the receipts and expenditure of financial resources of an economy but also an indication of the government’s policy direction and politics. The Finance Minister of India, Nirmala Sitaraman, presented the first full budget of Rs 50,65,347 crore on February 1. The budget is significant for Bihar due to many reasons. Later this year are the crucial assembly polls, and apart from an internal power tussle with the JD(U), the BJP is about to face an emerging Tejashwi who is trying to change the course of the RJD’s politics with developmental narratives.
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Sitaraman’s repeated mention of Bihar while announcing the Makhana Board, which will provide support for production, processing, value addition, and marketing of Makhana, as well as the foundation of the National Institute of Food Technology, Entrepreneurship and Management to cater to the food processing needs of the eastern region, financial support for strengthening the Western Kosi Canal in Mithilanchal, and infrastructure development for Greenfield airports, hostels, and other capacities for IIT Patna, sends clear political signals.
These initiatives serve as tokens for public consumption to create a narrative that a double-engine government is generous towards the development of Bihar in general and Mithilanchal in particular. The BJP needed to address Mithilanchal since the RJD had already advocated for the establishment of the Mithila Development Council last year.
However, a cursory scrutiny of the budget even shows that the picture of Bihar is not so rosy. The whole budget is focused on speedier second-generation reforms to send a signal to private investors, as industrial growth has slowed down in the current fiscal. Rising the limits of “No Income Tax up to 12 lakh” is being celebrated by the middle class. Notably, the middle-class population in Bihar is one of the lowest among the states. The gains of this provision to Bihar would be minimal.
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The other important sector for Bihar is agriculture, which is still the mainstay for the majority of the population. The state already has its fourth agricultural roadmap (2023-28) but is still struggling to gather funds. Moreover, there is a decline in subsidies on fertilisers by Rs 3550 crore, which will push up the price, leading to a rise in the cost of production. It will adversely impact the state’s agriculture.
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Another important segment for Bihar is rural development, as about 88.7 per cent of the population lives in rural areas. The Union Budget has proposed merely a 0.4 per cent increase over BE 2024-25. This implies that the budget for this sector has declined by 4.5 per cent in real terms. Even for the current fiscal year, the revised estimates have been reduced by Rs 75,133 crore. This has serious implications for the rural economy of the country in general and Bihar in particular.
The picture presented by the FM in her budget speech doesn’t match the hard facts. She tried to impress Bihar and Mithilanchal not only by mentioning some projects but also by her sartorial choice, reflecting her cultural affinity with this region. The BJP-JDU alliance in the centre and state may have many strategic equations, but the fact remains that the BJP government has seldom been benevolent to Bihar, be it for special status or special package or even acceding to the request of Nitish Kumar to make Patna University a Central university. Nitish Kumar may leave the political partners to keep guessing about his possible moves in the coming election.
The writer is former Director, A N Sinha Institute of Social Studies, Patna
