Bihar’s poor will pay the price for Nitish’s welfarism

Faced with an existential crisis within the Mahagathbandhan allliance, Nitish Kumar was left with no option but to return to the NDA fold. He will now lead the NDA government in Bihar to deeper welfarism ahead of the Lok Sabha elections.

His only achievement so far has been to make the government the primary source of employment. Nitish had appointed more than 2.16 lakh teachers to government jobs within a span of just 70 days during December-January.

After forming the Grand Alliance government in Bihar in August 2022, he had promised to create at least 10 lakh government jobs and an additional 10 lakh “employment opportunities” in several sectors which is nowhere in sight.

But he has claimed to have created 3.63 lakh government jobs, and assured that the promise of 10 lakh government jobs will not only be fulfilled but exceeded. Indeed, government remains the only major employer in Bihar. It employs 4.5 lakh people and pays pension to 6 lakh more. His erstwhile deputy, Tejaswi Yadav, had claimed that creating so many jobs within 70 days was a “historic” feat.

But governments elsewhere create conditions for the private sector to generate productive employment rather than becoming the sole source of employment.

Rising revenue expenditure

At the end of the RJD rule in 2005, salary and pension consumed 50 per cent of Bihar’s revenue expenditure (RE), leaving little for other development initiatives. Since Bihar enacted its FRBMA in 2006 at the prodding of the Finance Commission, the ratio was brought down to 28 per cent in FY22 by gradually reducing the employee strength.

Only then could it consistently generate revenue surpluses which accelerated growth. With a salary bill of almost ₹45,000 crore now, Bihar already is a revenue deficit State, and with 10 lakh additional government employees, salaries will again claim bulk of its RE.

Just before taking oath for a record ninth time, Nitish Kumar gave ₹2 lakh each to 94 lakh poor families of Bihar.

Bihar’s caste census showed that over a third or 94 lakh of the State’s families earned less than ₹6,000 a month; each family will now get ₹2 lakh over the next five years in three instalments.

This new “Laghu Udyami Yojana” will ironically be implemented by the Industries Department of Bihar government.

DuringNitish Kumar’s reign, industrial growth has come to a standstill, with the number of operational factories in Bihar increasing only marginally from 2,872 to 2,936 during the last 10 years, while employment grew from 1.27 lakh to 1.28 lakh, as per Bihar Government data.

The scheme will cost the State ₹2.5-lakh crore over the next five years. Besides this initiative, 63,850 landless families will also be given ₹1 lakh each to buy land to build a home.

Now even the NDA will be forced to follow suit. Nitish Kumar, who was credited with rescuing the State from the debt trap it was falling into under the Lalu regime, is taking the State back to the brink again, this time with the NDA.

He now cannot blame the Centre for refusing to finance the welfare of Bihar’s poor. Biharis will now pay the price.

The writer is a former Director General at the Office of the CAG and currently a professor at the Arun Jaitley National Institute of Financial Management.

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