Bihar’s pre-poll cash push sparks concerns over voter sway, ECI neutrality

It is raining cash for Bihar voters ahead of the two-phase Assembly elections on November 6 and 11. On September 26, 2025, Prime Minister Narendra Modi transferred Rs 10,000 each to 75 lakh women under a welfare scheme. This was followed by Chief Minister Nitish Kumar, who transferred Rs 10,000 each to 25 lakh women on October 3 and another 21 lakh women on October 6.

According to a letter written by RJD MP Manoj Kumar Jha to the Election Commission of India (ECI) on October 31, protesting the pre-poll cash transfers, the disbursements continued on October 17, 24, and 31, with the next round scheduled for November 7.

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On October 31, Union Home Minister Amit Shah said at a public rally in Bihar’s Nalanda that 1.41 crore women had already received the money.

Under the Bihar government’s Mukhyamantri Mahila Rojgar Yojana (MMRY), the funds are being transferred to “one woman from every family” aged between 18 and 60 years as “financial assistance” to help them start small businesses and become aatmanirbhar (self-reliant).

However, with the disbursements timed just ahead of the Bihar Assembly elections on November 6 and 11, it appears that most households in the state will have received the cash transfer by polling day, raising concerns that the scheme may be aimed at influencing voters.

Cash shower during electioneering

There was no ambiguity in Shah’s statement. Speaking at the Nalanda rally, he asserted that the Rs 10,000 “will not be taken back,” clarifying that it was not a loan. His remarks came in response to the Opposition’s allegation that the amount would eventually be recovered. He further assured that beneficiaries would later receive an additional Rs 2 lakh as a loan to support their ventures.

Meanwhile, many women who received the cash appear to have already spent it. The Indian Express reported on October 31 from Begusarai that several beneficiaries admitted to using the money to buy clothes, crackers for Diwali, and Chhath Puja items, or to repay portions of their microfinance loans.

This pattern is likely widespread, as it is implausible that millions of women could have submitted business proposals and received approvals in such a short span to qualify for the Rs 10,000 cash transfer.

The timeline itself raises questions. The MMRY scheme was approved by the state government on August 29. The prime minister began transferring funds on September 26, and just 10 days later, on October 6, the election dates were announced. The intent behind the timing appears unmistakable.

Selective enforcement of MCC

The ECI has yet to respond to the letter written by RJD MP Jha, who on October 31 drew its attention to the ongoing cash disbursal, alleging a violation of the Model Code of Conduct (MCC). However, several news reports have quoted unnamed ECI officials or “sources” saying that no action would be taken since the MMRY was an ongoing scheme that predated the enforcement of the MCC.

This explanation does not hold up. The same ECI had halted the disbursal of funds under Telangana’s Rythu Bandhu scheme on November 27, 2023, when the MCC was in force, stating: “There shall be no disbursement under the scheme till the model code of conduct in Telangana ceases to apply in all its forms.”

The ECI acted after initially allowing fund transfers for the rabi crop on the condition that the disbursal would not be publicised. When the then state finance minister violated this condition, the ECI responded promptly. Notably, the Rythu Bandhu scheme had been launched way back in February 2018.

In contrast, the MMRY is a brand-new scheme, launched just days before the election dates were announced. Cash transfers are continuing even as the MCC remains in force, and they are being widely publicised. For instance, Union Home Minister Amit Shah referred to the Rs 10,000 payment as “seed money” in an interview on October 29. On October 31, both Shah and Bihar Deputy CM Samrat Choudhary spoke about the scheme during a public rally in Nalanda, a video of which was shared on the BJP’s official YouTube channel, which has 6.28 million subscribers.

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Secondly, the ECI is duty-bound to act on its own MCC “guidelines on election manifestos,” which require all political parties to “reflect the rationale for the promise and broadly indicate the ways and means to meet the financial requirements for it” if their manifestos contain provisions that may be construed as “corrupt practice” under Section 123 of the Representation of the People Act, 1951. Such corrupt practices, like “bribery” and “undue influence”, undermine the free exercise of electoral rights.

While issuing these guidelines, the ECI stated that such disclosures were necessary “in the interest of transparency, level playing field, and credibility of promises,” adding that “trust of voters should be sought only on those promises which are possible to be fulfilled.”

The guideline was first introduced on April 25, 2015, after consultations with all political parties, with a directive that three copies of each manifesto must be submitted. It was reiterated on October 4, 2022, when the Commission proposed “to amend sub-para 3(iii) of Part VIII of the MCC.” The amendment has since been incorporated into the Compendium of Instructions on the MCC, issued before the 2024 general elections.

Yet, the ECI has not issued any notice to the ruling NDA coalition in Bihar, whose joint manifesto announced the MMRY scheme without outlining “the ways and means to meet the financial requirements.”

ECI flouting Supreme Court directives

The ECI’s amendment to Part VIII of the MCC was made following directions from the Supreme Court in 2013 and 2015 in the S. Subramaniam Balaji vs Government of Tamil Nadu and Others case. The case arose from complaints regarding the DMK’s 2006 election manifesto, which promised free colour televisions to voters.

The court observed that the “distribution of any kind of freebies of any kind undoubtedly influences people; it shakes the roots of free and fair elections to a large degree,” and directed the ECI “to ensure a level playing field” and “to see that the purity of the election process does not get vitiated” by issuing appropriate instructions under the MCC.

The court further noted that while it was “mindful” of the fact that the ECI “will not have any authority to regulate any act which is done before the announcement of the date” (under the MCC), “nevertheless, an exception can be made in this regard as the purpose of the election manifesto is directly associated with the election process.” By not acting on its guidelines, the ECI is, therefore, in violation of the court’s directive.

It is true that the MCC is a voluntary code, jointly adopted by the ECI and political parties in the 1960s, but it has since been upheld by successive governments and courts at all levels and has proven effective in ensuring free and fair elections until recently.

Holding free and fair elections is non-negotiable in a democracy. In India, the Supreme Court has declared free and fair elections to be part of the “basic structure” of the Constitution, most notably in the Indira Nehru Gandhi vs Shri Raj Narayan case of 1975. Justice HR Khanna had famously written that the “principle of free and fair elections, which is an essential postulate of democracy, and which in its turn is a part of the basic structure.”

Violation of the RP Act, 1951?

Constitutional expert PDT Achary says that the MMRY scheme falls under Section 123(2)(b) of the Representation of the People Act, 1951, adding: “A declaration of a public policy is not treated as undue influence only when there is no intent to interfere with the free exercise of electoral right, but in Bihar’s case, the intent to interfere with the free exercise of electoral right can be gauged from the timing of the public policy declaration.”

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Section 123 deals with “corrupt practices” by candidates and their agents, but its sub-clause 2(b) brings in “public policy” — which applies to governments that announce public policies, not to candidates. It reads: “A declaration of public policy, or a promise of public action, or the mere exercise of a legal right without intent to interfere with an electoral right, shall not be deemed to be interference within the meaning of this clause.”

The Bihar government’s intent can be questioned because Nitish Kumar has been the chief minister for the past 20 years, over 15 of them as the head of the NDA alliance, the latest term beginning in January 2024. In all these years, the Bihar government could have announced the MMRY scheme without waiting for the 2025 elections to draw near.

This appears to be an unprecedented situation of a government launching a scheme on the eve of elections to renew its mandate. The last comparable instance was when the Centre’s vote-on-account budget of February 1, 2019, announced the PM-KISAN scheme (modelled on the Rythu Bandhu scheme), under which Rs 6,000 was to be given to “12 crore small and marginal farmers” with an outlay of Rs 75,000 crore. It came with a “retrospective effect” from December 1, 2018.

This marked a break from the convention of not making policy decisions in a vote-on-account budget, which is traditionally meant only to pass expenditure for a quarter until the new government presents the full budget.

A month and a half later, on March 16, 2019, the dates for the 2019 general elections were announced. The prime minister transferred the first instalment of Rs 2,000 on February 25, 2019.

However, this case was not challenged in court. An interesting legal battle may ensue if the election-eve MMRY scheme is challenged.

Can Bihar afford MMRY?

The ECI may have let off the NDA without seeking an explanation for “the ways and means to meet the financial requirements” of the MMRY, but it is clear that the Bihar government cannot afford it.

There is no official account of the number of beneficiaries, but according to two national dailies, which quoted data from the Bihar government’s caste census of 2022 (released in November 2023, though only part of the report is in the public domain), the state had “2.97 crore families” in 2022. The number may have increased since then.

Assuming every family has a woman aged between 18 and 60 years, a cash handout of Rs 10,000 to 2.97 crore families would amount to Rs 29,700 crore — or 9.4 per cent of Bihar’s total budget of Rs 3.2 lakh crore for FY26.

After the women start businesses, an additional amount of up to Rs 2 lakh would be given as “loans” to each. This would require a total of Rs 5.94 lakh crore. Bihar simply does not have the funds for this, as the amount would be almost 186 per cent of its entire FY26 budget of Rs 3.2 lakh crore.

Besides, 78.5 per cent of Bihar’s FY26 budget, or Rs 2.49 lakh crore, is not even its own money. It comes from central transfers (Rs 1.93 lakh crore) and borrowings (Rs 55,737.8 crore). Bihar’s own resources (revenue and capital) amount to only Rs 67,740.6 crore.

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Bihar cannot borrow more either, because an additional borrowing of Rs 5.94 lakh crore (Rs 2 lakh each for 2.97 crore women/families) would raise Bihar’s already bloated borrowing level of 5 per cent of GSDP in FY26 to a staggering 54 per cent of GSDP.

At 5 per cent of GSDP for FY26, Bihar’s borrowing already violates the FRBM Act of 2003, which caps it at 3 per cent.

The prime minister, Union home minister, and chief minister surely know this, as Bihar has relied on an average of 74 per cent of its total revenue from central taxes and grants over the past 20 fiscals, between FY06 and FY25.

All these facts point in one direction: the cash handout of Rs 10,000 is intended to win votes, vitiating the level playing field and the conduct of free and fair polling.