By Bhaga Warkhade
The Cost of Pre-election Promises:
The promise of free electricity ahead of elections raises serious concerns about Bihar’s fiscal health. CM Nitish Kumar has declared that households will receive 125 units of free electricity per month. However, subsidies on power already consume nearly half the state’s budget. For FY 2024–25, the Bihar government has allocated ₹15,343 crore under the "Mukhyamantri Vidyut Upbhokta Sahayata Yojana." In a state like Bihar with limited resources, such populist welfare schemes risk destabilizing the economy. Capital expenditure could be diverted toward debt repayment.
Alongside the free electricity pledge, Nitish Kumar also announced a plan to install rooftop solar panels on every home over the next three years. The timing—just before elections—clearly reflects the growing trend of offering free handouts to woo voters. While not a new strategy, the scale of these promises is expanding. In 2023–24, states like Maharashtra spent around ₹96,000 crore (2.2% of GSDP), Karnataka ₹53,700 crore (1.9%), and Bihar around ₹20,000 crore (2.1%) on such schemes. States like Punjab, Jharkhand, and Rajasthan are already under financial strain. Punjab, due to excessive borrowing, ranks lowest on the NITI Aayog’s fiscal health index. This is not merely a policy issue—it’s about state capacity. Bihar’s tax collection is weak, and its borrowing capacity is limited. With rising expenditure and stagnant revenue, can the state afford another guarantee?
Only 2–3% of India’s population—mainly the urban middle class—pays income tax. This class is now growing resentful under the burden of subsidies. Meanwhile, Nitish Kumar remains firm, stating that 125 units of free electricity will be guaranteed. However, a recent RBI report titled “State Finances: A Study of Budgets 2024–25” warned that such spending could limit funds for other critical social and infrastructure projects.
The Growing Political Utility of Free Power:
Free electricity is once again at the center of Indian politics, this time with Bihar in focus. Nitish Kumar has announced that starting August 1, all domestic power consumers in Bihar will receive 125 units of electricity for free each month. An estimated 1.67 crore households will benefit directly from this scheme.
The Aam Aadmi Party (AAP) pioneered the free electricity promise in Delhi elections, later expanding the model to other states. Initially, free power was a benefit mostly reserved for farmers. Now, the promise of free units is being offered to the general public. AAP leader and former Delhi CM Arvind Kejriwal successfully made free electricity a political highlight. In 2013, upon entering Delhi politics, Kejriwal focused on issues with direct public appeal, and free electricity topped the list. At first, other parties struggled to grasp the significance of the policy. BJP even mocked it as “freebies” or “rewri culture.” However, once Kejriwal's policy succeeded in Delhi, many leaders from other parties began to replicate it.
In recent elections, nearly every major party dangled the bait of free electricity. The scheme found success in Punjab, Rajasthan, Jharkhand, and Himachal Pradesh. Now, all eyes are on Bihar to see if it follows suit.
State-wise Subsidy Landscape:
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Punjab: AAP-led government provides 300 units of free power to households, a key electoral promise now implemented.
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Rajasthan: Households receive 300 units of free electricity, benefiting around 5 lakh families.
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Delhi: Offers 200 units free; beyond that, consumers pay. Around 48 lakh out of 58 lakh domestic consumers benefit.
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Jharkhand: Recently increased its cap from 100 to 125 units of free electricity.
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Himachal Pradesh: Under Congress rule, offers 125 units of free power to the general public, offering substantial relief.
Clearly, electricity subsidies are in high demand and have become a “winning formula” in elections across states like Delhi, Punjab, UP, Gujarat, Himachal Pradesh, Rajasthan, Karnataka, Madhya Pradesh, and Tamil Nadu. Now, it has arrived in Bihar.
Nitish Kumar’s move to offer 125 units of free power from August 1 is seen as a political gamble. As the saying goes, “Victory justifies the means—whether through strength or strategy.” Bihar is not the only state where such promises are made before elections—this trend has become common nationwide. Political parties are busy illuminating their fortunes with the current of free power. New promises often bury old failures, in line with the adage “Old wounds are forgotten under new shadows.”
By announcing free electricity before the elections, Nitish Kumar has posed a significant challenge to Lalu Prasad Yadav’s RJD. With a large share of the population falling under BPL, labor, and lower-middle-class categories, the move is likely to ease the electricity bill burden on millions. In essence, Nitish has released a pre-election manifesto targeting the poor and middle class. The policy will directly benefit 1.67 crore households and save each family approximately ₹900 per month.
In his campaign speeches, Nitish often criticizes Lalu’s “lantern era” and evokes memories of the days when people relied on lanterns after sunset. He’s clearly tapping into emotional chords to win votes.
After playing the “free electricity” card, the JD(U)-BJP alliance may have complicated things for the RJD. In the next three years, every household consumer will either have a rooftop solar project or benefit from a nearby community solar installation. Under the Kutir Jyoti Yojana, the government will fully cover solar power setup costs for the extremely poor. Others will receive necessary assistance as well.
As a result, domestic consumers will not have to pay for up to 125 units of electricity, and estimates suggest Bihar could generate up to 10,000 MW of solar energy in the next three years.
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