Bihar deserves freedom from its politics of patronage—Three generations after independence, can it finally be free?

Bihar’s contradictions are striking. It is one of India’s youngest and most enterprising states. Its migrant workers build the nation’s cities, from Delhi’s construction sites to Surat’s textile mills. The money they send home powers much of eastern India’s consumption.

Yet, the state’s economy remains fragile: its per capita income is barely a third of the national average, and its literacy, health and infrastructure indicators lag behind nearly every large state.

If competitive elections automatically produced accountability, Bihar would have transformed long ago. Instead, politics has become a contest over who controls resources rather than how well they are used. Grand schemes with catchy acronyms are launched every few years, but few survive beyond their announcements. Patronage, not performance, has long been the political currency.

Institutions lie at the heart of this stagnation. Schools exist without teachers, hospitals without doctors and roads without maintenance. Agriculture still employs more than 60% of the workforce but contributes only about a fifth of state output. Manufacturing accounts for barely 10%.

Migration has become Bihar’s silent stabiliser, easing joblessness but draining its most ambitious youth. In this vacuum, populism thrives. When the state fails to deliver services, politics turns to what it can distribute quickly: subsidies, caste favours or symbolic gestures.

Poor governance breeds populism, and populism then entrenches poor governance.

To be sure, Bihar has made some progress. Two decades ago, the average Bihari household spent only about three-fourths of what an average Indian household did. Today, it spends nearly nine-tenths. The poorest households now consume slightly more than equally poor families elsewhere. Scheduled Caste, Scheduled Tribe and backward-class groups have closed most of the consumption gap while Muslim households, once far behind, are now almost at par.

But this equalisation has not brought vitality. The middle class is shrinking even as the poor catch up. Families dependent on salaries or small businesses spend far less than their peers nationally while farm households have improved through welfare transfers, rural wages and remittances. Bihar has become more equal but not more dynamic. It has compressed incomes rather than expanded opportunity.

The next government must move from redistribution to productivity, from welfare politics to wealth creation. The first step is to make governance measurable. Bihar needs an outcome-based budgeting system in which each department sets clear annual targets such as reducing maternal deaths, improving school learning, raising farm incomes or keeping rural roads usable throughout the year.

Decentralisation must accompany this reform. Local bodies in Bihar have elections but little fiscal power, directly managing only a small fraction of development spending. This must change. A fixed share of the plan budget should go directly to panchayats and municipalities that prepare three-year development plans through public consultations.

To ensure quality, the state should create small professional teams of engineers, planners and accountants called District Development Cells. This will help local bodies design and monitor projects. When power and purse meet at the grassroots, accountability becomes visible.

The next frontier lies in the rural economy, which remains both Bihar’s strength and vulnerability. The challenge is not just productivity but profitability.

Farmers often earn less than half the consumer price because of weak logistics, limited storage and poor processing facilities. Bihar must scale up Farmer Producer Organisations and create modern rural aggregation hubs with cold storage, grading and digital price discovery through cooperative or public-private partnerships.

With better infrastructure and access to markets, Bihar can become eastern India’s agricultural processing hub and generate thousands of non-farm jobs.

To sustain inclusive growth, Bihar must also think bigger. It needs a rural development model as ambitious as India’s Smart Cities Mission because nine out of 10 Biharis still live in villages.

A Smart Village Mission can become the foundation of a more balanced future. Smart Villages would combine reliable roads and power with solar lighting, broadband connectivity, clean water, digital governance and skill centres. Each cluster of villages could act as a local growth hub linking farmers, schools, small enterprises and service providers through shared infrastructure.

By treating rural Bihar not as a welfare recipient but as a growth engine, the state can reduce migration, create local jobs and expand opportunity within communities.

None of these reforms will work without transparency. Bihar must make governance visible before it can make it accountable. Technology cannot replace political will, but it can reveal how money is spent and who delivers. Politics will change only when citizens reward performance instead of patronage.

Bihar’s challenge has never been poverty itself but the persistence of poverty by design. The state has ambition and talent; what it lacks are institutions that reward results. The next government must prove that governance, not giveaways, earns public trust.

Three generations after Independence, Bihar deserves a second freedom—freedom from low expectations through accountable governance, thriving smart villages and a politics that finally values delivery over distribution.

The author is managing director and chief executive officer of People Research on India’s Consumer Economy.