How Delhi and Bihar polls shaped a bulk of FM Sitharaman's budgetary allocation

FM Nirmala Sitharaman

A day after finance minister Nirmala Sitharaman presented her 8th consecutive budget-- aimed significantly towards placating a major chunk of Bharatiya Janata Party's core constituencies-- women, middle class, youth and farmers, a noticeable, yet less discussed point was how the budget invariably gave a lot of attention to two poll-bound states- Delhi and Bihar.

A point, that the Opposition was quick to latch on to minutes after FM Sitharaman finished her budget address. A closer analysis of the annual financial document reveals that an immediate political calculation did play a big role in many of the schemes that were meant for a specific target audience.

The immediate target audience for the tax sops may be Delhi’s 40 lakh income taxpayers, where the BJP is locked in a strong battle with the Aam Aadmi Party for the February 5 elections. But Bihar, where elections are scheduled for later this year, formed the centre piece of this calculation.

The Union government complying with the Election Commission of India’s directive not to announce any Delhi-specific schemes or sops in the Union Budget 2025-26, managed to give voters in the election-bound city many reasons to cheer.

When soft power was in display

The signs could not not be missed from very early in the morning as the FM Sitharaman turned up in Parliament wearing a Madhubani art print saree to present the Union Budget. The Madhubani art has origins in Bihar's Mithila region. The saree was gifted by Padma Shree Dulari Devi to Sitharaman during her last visit to Bihar.

From Makhana Board to NIFT

The FM announced the setting up of a 'Makhana Board' to help farmers growing 'superfood' makhana. The state also received an infrastructural boost, with her announcing the expansion of the Patna airport, and setting up of four new greenfield airports and a brownfield airport at Bihta. She also proposed the setting up of a National Institute of Food Technology, Entrepreneurship and Management in Bihar to provide a strong fillip to food processing activities in the eastern region.

The finance minister also proposed financial aid for the Western Kosi Canal ERM project in the Mithilanchal region of Bihar, benefiting several farmers cultivating over 50,000 hectares of land in Bihar. The FM also announced the expansion of the existing IIT in the state.

Why Bihar matters?

Notably, Nitish Kumar's JD(U), along with Chandrababu Naidu's TDP, played a key role in NDA forming the government as the BJP failed to get a majority on its own in the Lok Sabha polls. Weeks later, Bihar got a bonanza, with the Centre announcing Rs 26,000 crore in the 2024 Budget for various road projects in the state.Bihar is set to go to the polls later this year. The Mithilanchal region of the State got special attention in the Budget.

What Budget 2025 had for Delhi's electorate

Apart from the tax exemption for the middle class, which will benefit Delhiites like all Indian citizens, many Central schemes may indirectly benefit city voters like slum dwellers and residents of unauthorised colonies that need an infrastructure boost.

PM SVANidhi scheme, which has benefitted more than 68 lakh street vendors by giving them respite from high-interest informal sector loans, will continue to benefit Delhi vendors, most of whom are from Purvanchal and live in slums or unauthorised colonies in the city.

For middle-class Delhiites, who are paying EMIs in housing projects that have run into trouble, the Budget announced a new fund to expedite the completion of stressed projects. The FM said in her speech, “Under the Special Window for Affordable and Mid-Income Housing (SWAMIH), 50,000 dwelling units in stressed housing projects have been completed, and keys handed over to home-buyers. Another 40,000 units will be completed in 2025, further helping middle-class families who were paying EMIs on loans taken for apartments, while also paying rent for their current dwellings.”

Urban Challenge Fund

The FM in her budget speech said, “The Government will set up an Urban Challenge Fund of Rs 1 lakh crore to implement the proposals for ‘Cities as Growth Hubs’, ‘Creative Redevelopment of Cities’ and ‘Water and Sanitation’ announced in the July Budget.” This fund would probably help fund projects like the Yamuna riverfront development, expanded tap water supply, sewer laying and pucca houses for slum dwellers in Delhi.