5. BIHAR ECONOMIC SURVEY 2025-26: A High-Growth Trajectory

The 20th edition of the Bihar Economic Survey, presented by Finance Minister Bijendra Prasad Yadav, highlights the state\'s significant economic resilience and expansion. Surpassing national trends, Bihar hasemerged as one of the fastest-growing sub-national economies in India, driven by strategic sectoral diversification and robust fiscal discipline. • Growth Outperformance: Bihar recorded a stellar GSDP growth rate of 13.1% in 2024-25, notably higher than India\'s national average of 9.8%, signaling a strong post-pandemic recovery and structural shift. • Per Capita Income Surge: The Per Capita GSDP at current prices witnessed a substantial increase, rising from ₹46,412 in 2020-21 to ₹76,490 in 2024-25, reflecting improved standards of living. • Fiscal Expansion: Total government expenditure increased significantly from ₹1.66 lakh crore in 2020-21 to ₹2.82 lakh crore in 2024-25, focusing on capital-intensive and social sectors. • Strategic Sectoral Focus: The state has consistently prioritized developmental spending on Education, Health, Energy, Transport, Irrigation, and Agriculture, which serve as the backbone of its ruralcentric economy. • Macroeconomic Stability: Growth has been anchored by moderate borrowing, effective debt servicing, and disciplined financial management, keeping the fiscal deficit within manageable limits. • Human Capital Emphasis: A sustained focus on employment generation and infrastructure enhancement is noted as the primary driver for the state\'s \'optimistic and forward-looking\' economic evaluation. KEY DEFINITIONS AND CONCEPTS • Gross State Domestic Product (GSDP): The aggregate value of all finished goods and services produced within the geographical boundaries of a state in a specific timeframe. • Per Capita GSDP: An indicator of the average economic output per person, calculated by dividing the GSDP by the state\'s total population. • Fiscal Trajectory: The path of a government\'s finances, including its patterns of revenue collection, spending, and debt management over time. • Debt Servicing: The cash that is required to cover the repayment of interest and principal on a debt for a particular period. CONSTITUTIONAL AND LEGAL PROVISIONS • Article 202: Requires the Governor of a State to cause to be laid before the House or Houses of the Legislature an \'Annual Financial Statement\' (Budget). The Economic Survey traditionally precedes this. • Article 293: Governs the borrowing powers of States. Borrowing by Bihar must be within limits set by the State Legislature and requires Central consent if any part of a previous loan from the Centre is outstanding. • FRBM Act (State Level): The Bihar Fiscal Responsibility and Budget Management Act mandates the state to ensure fiscal stability and keep the fiscal deficit generally below 3% of GSDP (subject to relaxations by the Finance Commission).• Finance Commission Recommendations: Bihar, as a \'low-income state\' with a high population density, relies heavily on the Horizontal Devolution (Article 280) of taxes for its developmental expenditure

FISCAL SUMMARY (2020-21 vs 2024-25)

CONCLUSION The Bihar Economic Survey 2025-26 paints a picture of a state successfully breaking away from the \'BIMARU\' tag through consistent double-digit growth. While the state’s growth has outpaced the national average for three consecutive years, the transition from a consumption-led to an investment-led economy remains crucial. To sustain this momentum, continued fiscal support from the Union and further diversification into the manufacturing and IT sectors will be vital to bridge the gap in absolute per capita income compared to industrialized states. UPSC RELEVANCE • GS Paper III (Indian Economy): Mobilization of resources, growth, development, and employment; Government Budgeting; Inclusive growth and issues arising from it. • GS Paper II (Polity & Governance): Federalism and Centre-State financial relations; role of the Finance Commission in supporting lagging states. • Prelims Focus: Comparison of state vs. national growth rates; components of GSDP; Articles 202 and 293; and specific socio-economic indicators of Bihar.