Taking off from Bihar debate, centre has to balance welfare pitch with sustainable development, reverse migration & make prosperity inclusive
K.A. Badarinath
Two simultaneous developments have had happened. Both these, though unconnected, have a linkage of sorts. Our most vibrant state, Bihar has gone to polls and a new government will be in place few days from now. On the other end, finance minister Nirmala Sitharaman has begun a mammoth exercise to present her next federal budget on February 1, 2026.
One could be wondering as to what’s the linkage between the two albeit even indirectly.
This budget will have to put together a new model for socio-economic development taking on board political freebies that are promised in state legislative assembly elections or Lok Sabha polls.
Freebies, Revdies & Social welfare
Not many socio-economic analysts or thinkers would support the idea of a welfare state in a globally inter-connected world of markets, investments and trade that’s fiercely competitive.
Ahead of state elections, Nitish Kumar led BJP – JDU alliance with splinter parties in tow announced two big projects. Through Mukhya Mantri Mahila Rojgar Yojana (MMRY), Rs 10,000 was given to each of 1.5 crore women through direct benefits transfer (DBT).
About 1.1 crore elderly women, widows and disabled were given enhanced pension of Rs 1100 from earlier Rs 400 per month. The two schemes alone added an extra outgo of Rs 14240 crore that constitute about six per cent of total revenue expenses of Rs 252,000 crore for 2025-26. Over and above, BJP – JDU led National Democratic Alliance has promised free power, water supply, one crore jobs, higher support to farmers etc in its bid to return with a thumping mandate.
Some bracket these freebies as tools for socio-economic empowerment while others call them ‘Revdis’ or vote doles’, the sweet snack made out of sesame seeds and jiggery. Well, the debate is not about direct benefit transfers which have been refined by Narendra Modi government as surest way of reaching benefits to the needy, eliminate inefficiency and pilferage of funds.
Larger question is what’s the sustainable model of economic governance that Bharat should adopt to expand, deepen her growth story and spread prosperity?
Cash doles can at best act as booster dose for economic empowerment on temporary basis but unsustainable in the long run as experienced in several states including Karnataka, Himachal Pradesh and now Madhya Pradesh and Maharastra.
Skilling and competencies, creating work opportunities for goods and services, low-cost credit support to making large chunk capital investments that create jobs may be sustainable.
No two economists agree on either of the models for development. A blend of these two approaches may be workable in the medium to long term. Taking Bihar as latest to join the bandwagon of states on the cusp of economic development, Finance Minister Nirmala Sitharaman would do well in providing clarity on approach to economic development.
For several years, NDA, BJP and Prime Minister Narendra Modi resisted temptation of going populist through their campaigns in states and centre. But, competitive populism practiced by its political rivals has pushed NDA to rethink on ‘freebies’ or cash doles as a ‘winning formula’ and ‘economic empowerment’ tool. Both, Karnataka and Himachal Pradesh states have been pushed into economic chaos or deep debt burden by respective Congress governments that promised the moon in their political campaigns drawing inspiration from Aam Admi Party’s manifestos in Punjab and Delhi.
Therefore, big question to be addressed by finance minister Sitharaman was salience of freebies.
Mirgration & Economic Empowerment
Both NDA and opposition parties led Maha ghatbandan have made huge promises on jobs to win votes in Bihar. One crore jobs have been promised by NDA and one government job in each Bihar family is what Rashtriya Janata Dal has promised.
Jobs creation, investments and migration have direct and intricate linkages in Bihar and elsewhere. As per New Delhi based Institute for Human Development, over 65 per cent households in Bihar cutting across caste lines have at least one migrant each. Their remittances constitute at least 50 per cent of a household’s income. Outward migration from Bihar tripled rural wages centred in construction and agriculture sectors.
The data suggests manufacturing employs a measly five per cent people. It’s near impossible to provide jobs to growing youth population. As per the institute, in 2025, 12.8 lakh youngsters completed secondary school education and over 27 per cent of state’s population was aged below 15 years.
For different states, these numbers may differ. But still, youngsters below 15-years age would constitute a whopping 15.6 per cent of total population in Bharat.
Creating opportunities in manufacturing, services and agriculture apart from exports from rural India is relatively more sustainable to tackle migration. A comprehensive survey on opportunities, jobs, industry, agriculture and exports in each state should dictate our policy priorities.
Sridhar Vembu of Zoho Corporation has demonstrated that he could lead a global corporation even while being in a remote Tamil Nadu village. Remote working by professionals across sectors has allowed them to move out of cities while they discharged job related tasks. Huge network of roads, rail, ports, airports infrastructure, data and telecom connectivity in semi-urban and rural areas should come handy in formulating a policy against migration.
First step will be to stop this migration out of villages. Secondly, reversing the migration back to villages and finally reversing brain drain from the country should be an economic priority. Re-modelling our economic development paradigm with migration at centrality of policy making should be attempted.
Ultimately, economic growth should be sustainable in long run, translate into prosperity for last man standing in the spirit of Antyodaya, make welfare and opportunities inclusive while expanding global linkages. Getting the economic governance model right is the challenge.
(Author is Director & Chief Executive of New Delhi based non-partisan think tank, Centre for Integrated and Holistic Studies)
