RJD leader Tejashwi Yadav on Wednesday, June 10, 2026 sharply questioned the financial health of Bihar, alleging that the state cabinet had approved a withdrawal of Rs 3,662 crore from the Bihar Contingency Fund to pay social security pensions for May, June, and July 2026 — a move he described as a sign of impending fiscal emergency.

Context

In a detailed post on X, Tejashwi Yadav posed pointed questions to the state government: 'क्या बिहार दिवालिया होने के कगार पर है?' ('Is Bihar on the verge of bankruptcy?'). He argued that deploying the Contingency Fund — a constitutional reserve meant for unforeseen crises and natural disasters — for routine pension payments signals that the state treasury is under severe stress.

Yadav, who serves as Leader of the Opposition in the Bihar Legislative Assembly, stated that employees' salaries and pension payments have not been processed for four to five months, and that contractors have not received dues for over a year. He has been raising this issue, he said, for the past six months.

Policy Backdrop

Under Article 267 of the Constitution, states maintain a Contingency Fund to meet urgent, unforeseen expenditure pending legislative authorisation. Historically, Bihar has drawn on this fund during floods and natural disasters — not for recurring welfare obligations like social security pensions, which are ordinarily met through regular budgetary provisions.

Social security pensions in Bihar were expanded through successive annual budgets from the early 2010s onwards, covering elderly, widowed, and disabled beneficiaries. The alleged routing of three months' pension outgo through the Contingency Fund would mark a significant departure from established fiscal practice, according to Yadav's post.

He also alleged that the same cabinet meeting discontinued the long-running Bihar State Crop Assistance Scheme (Bihar Rajya Fasal Sahayata Yojana), which provides relief to farmers for crop losses, citing a lack of funds. Additionally, he claimed that the Student Credit Card Scheme has stalled and scholarship disbursements to students have been suspended.

Stakeholders and Impact

The groups most directly affected, if the allegations are accurate, include pensioners dependent on monthly social security transfers, state government employees awaiting salary arrears, contractors with pending dues from projects sanctioned as far back as 2023–24, farmers who relied on the crop assistance scheme, and students under the credit card and scholarship programmes.

Yadav also pointed to heavy power cuts as an additional sign of fiscal strain, and noted that work orders approved in 2023–24 have yet to see ground-level commencement, while announcements made in 2025 and 2026 remain unimplemented. He called on the Chief Minister to address the people of Bihar directly on the state's financial condition rather than focusing on 'unnecessary issues.'

What's Next

Opposition pressure is likely to intensify in the Bihar Legislative Assembly, with demands for a detailed statement on contingency fund withdrawals, salary arrears, and the discontinuation of welfare schemes. Scrutiny from constitutional audit bodies on the use of the Contingency Fund for recurring expenditure could follow, particularly if supplementary demands or revised estimates are tabled in the next session.

The broader debate touches on a pattern seen across Indian states: opposition parties citing contingency fund usage for routine payments as evidence of cash-flow distress, often linking it to central transfer delays, GST compensation shortfalls, and coalition-driven spending trade-offs between welfare and capital outlay. How the Bihar government responds — and whether it presents an alternative fiscal account — will define the next phase of this political and policy confrontation.