Bihar government employees go unpaid in March 2026:How rising debt and freebies are impacting state budget

The Bihar government is currently facing a difficult financial situation. Reportedly, thousands of government employees have not yet received their salaries for the month of March 2026. The delay has put lakhs of state government employees in trouble. Why govt employees are unpaid in Bihar? The delay is mainly due to a cash crunch at the state treasury. In the run-up to the assembly elections, many freebies were announced to attract voters. The direct cash grants led to the National Democratic Alliance (NDA’s) sweeping victory in the Bihar elections 2025 with more than 200 seats. In the final weeks of March—the end of the financial year—the government spent heavily on various public projects and welfare schemes. Additionally, Bihar relies heavily on the Central Government for funds. The state is currently waiting for approximately ₹8,500 crore in transfers from the Centre. Additionally, there are reports that the Samrat Chaudhary led government also awaits ₹12,000 crore loan from the Reserve Bank of India (RBI). Until this money arrives, the state has had to temporarily control big payments like salaries. A look at Bihar’s finances To understand the bigger picture, lets look at the state’s financial condition: Total Debt: Bihar is currently reeling under a massive debt. For the 2026-27 period, the total outstanding debt is estimated to be around ₹4 lakh crore. This reflects the state owes a lot of money to lenders compared to what it earns. Budget Size: The Bihar government recently passed its largest-ever budget for the year 2026-27, totaling ₹3.47 lakh crore. Gross State Domestic Product (GSDP): In FY26, the state’s economy grew at over 13.1% rate to clock GSDP of ₹9.92 lakh crore. The Cost of freebies and welfare schemes:
A large part of Bihar’s budget goes into social welfare expenditure. Percentage of Budget: About 35% of the total budget (around ₹1.22 lakh crore) is set aside for various government schemes and welfare programs. Other Major Schemes: The government runs several programs which include the following: Mukhyamantri Cycle Yojana: Giving free bicycles to school girls. Kanya Utthan Yojana: Financial help for girls from birth until graduation. Student Credit Card: Loans up to ₹4 lakh for higher studies. Kisan Samman Nidhi: A yearly payment of ₹9,000 to farmers. Free Electricity Water: Programs to ensure every home has a tap and a power connection. While these schemes help the impoverished, they require a lot of cash. When tax money doesn’t come in fast enough, the government struggles to pay its own employees.