In the financial year 2024–25, Bihar spent about 3.27 lakh crore rupees although its income was only Rs 2.44 lakh crore. This means the state spent Rs 82,000 crore more than it earned. The government borrowed Rs 63,000 crore. There is a huge gap between Bihar’s income and spending. When a government spends more than it earns, it is called a fiscal deficit. In 2024–25, Bihar’s fiscal deficit was 9.2 percent of the state’s GDP. India’s overall deficit was 4.8 percent.
By the end of 2024–25, Bihar’s total debt was Rs 3.48 lakh crore. This is 38.9 percent of the state’s GDP. In simple terms, for every Rs 100 Bihar produces, it owes Rs 40. It means about every person from among the 13 crore people of the State have a loan of Rs 27,000.
According to the CAG's report, only 11 states in India have a higher debt-to-GDP ratio than Bihar. Bihar is the fifth most indebted state. The bigger problem is that most of this borrowed money is used to repay old loans and meet fixed expenses. Most of it is not used to build new assets.
According to the 2025–26 budget estimates, by 2027–28, Bihar’s debt is expected to remain around 34.9 percent of GDP. The 2025–26 budget revealed that Bihar pays Rs 23,014 crore a year as interest. This means about Rs 63 crore rupees every day goes to pay interest.
The 2025–26 budget, Bihar claims that it will earn Rs 2.61 lakh crore and spend Rs 2.94 lakh crore. The deficit will be met through loans.
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