The initiative, set to begin from 1 August 2025, marks a significant shift in the state’s welfare policy, with the Chief Minister stating that the measure aligns with his administration’s long-standing effort to make essential utilities more affordable. The decision, which was officially shared through a public statement on social media, is expected to impact families across both rural and urban Bihar and could reshape voter dynamics in the run-up to the state elections.
According to data released by the Bihar State Power Holding Company Limited, the scheme will cover approximately 1.67 crore families. The free allocation applies solely to domestic connections, and any usage above the 125-unit threshold will be charged at the prevailing tariff for the excess units consumed.
Nitish Kumar described the move as an extension of his government’s ongoing push towards welfare-oriented governance. In his statement, he emphasised the state’s consistent record of providing electricity to every household since the major expansion of rural electrification under his tenure. The Chief Minister also indicated that the power distribution network has stabilised enough in recent years to support a wider subsidy programme without significantly straining the state’s fiscal position.
Energy department officials said preparations are underway to reconfigure the billing system to accommodate the policy shift, ensuring that bills issued for the July cycle reflect the revised structure. Consumer groups across Bihar welcomed the decision, describing it as a long-awaited measure that would reduce monthly household expenses, particularly for low-income families in areas where alternative energy sources remain inaccessible.
The timing of the announcement, made months ahead of the legislative elections, has drawn sharp reactions from opposition parties. Senior leaders from the Rashtriya Janata Dal and Congress accused Nitish Kumar of attempting to sway public sentiment through populist measures. Critics argued that the policy, while beneficial in the short term, lacks a sustainable funding mechanism and could weaken the financial health of the state’s power utilities.
However, state finance department sources indicated that the scheme’s initial funding will be met through redirected subsidies and an expected increase in tax revenue collections during the current fiscal. Economists watching Bihar’s budgetary allocations have suggested that the success of the scheme will depend on how efficiently it is implemented and whether the anticipated surge in consumption remains within manageable limits.
A power sector analyst based in Patna noted that Bihar's per capita electricity consumption remains below the national average, giving the government some leeway in offering targeted benefits. According to the Central Electricity Authority’s latest figures, Bihar’s annual per capita consumption is under 300 units, compared to the national average of over 1,200 units. This disparity, the analyst added, implies that the 125-unit cap could cover a significant proportion of actual monthly consumption for many low-use households.
Past surveys by the Development Management Institute and other research organisations have shown that the majority of rural households in Bihar use electricity mainly for lighting, fans, and charging mobile phones, with limited appliance penetration beyond that. As such, the capped benefit is likely to serve its intended purpose of covering basic domestic needs.
The Chief Minister’s move comes at a time when energy affordability is emerging as a critical issue in political debates across several states. As Bihar prepares for elections amid growing public focus on inflation and utility bills, Nitish Kumar’s announcement could be seen as an effort to secure his administration’s welfare credentials.
Power sector officials have confirmed that no additional paperwork will be required from consumers to avail the free electricity benefit, as the revised billing will be automatic for all eligible domestic accounts. Consumers whose usage exceeds the threshold will only pay for the units beyond 125, calculated as per their existing slab rates.