The slew of reforms undertaken by the Central Government in areas of taxation, both direct and indirect, with a view to spur consumption will have a far-reaching impact of India’s growth as the country aims to become a $5 trillion economy by 2027 and becoming the third largest economy. The Government in budget 2025-26 announces hike in income tax rebate to Rs 12 lakh per annum and Rs 12.75 lakh per annum for salaried class.
While this will stimulate demand and spur consumption across India, in states like Bihar, lower- and middle-income earners like teachers, junior government employees, small business owners etc. will benefit with increased disposable income.
To add to this, the 56th meeting of the GST Council held in New Delhi under the chairpersonship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman made the recommendations relating to changes in GST tax rates, provide relief to individuals, common man, aspirational middle class and measures for facilitation of trade in GST.
The reforms aim as rationalisation of the current 4-tiered tax rate structure into a citizen-friendly ‘Simple Tax’ - a 2-rate structure with a Standard Rate of 18 per cent and a Merit Rate of 5 per cent; a special de-merit rate of 40 per cent for a select few goods and services.
This will have a monumental positive impact on the populace of Bihar in the form of lowered rates for oil, soap, shampoo etc., food items, consumer durables, tractors, cars and motorcycles, medical devices, life saving drugs, beauty and well-being, agriculture goods, cement, hotel accommodation, health insurance among others. Bihar recorded 15 per cent YoY growth in GST revenue in August 2025 to Rs 1717 crore. Similar trends have been seen in previous months.
The state is also undergoing an infrastructure metamorphosis in the form of construction of expressways and high-speed corridors besides state highways among others. The centre and Bihar government will together invest Rs 1,18,849 to develop five expressways in Bihar which will reduce the travel time to reach the capital city Patna from any part of the state within 3.5 hours by 2027.
These expressways will re-define the socio-economic landscape of Bihar and enable faster movement of people and goods - a phenomenal step towards unlocking new growth opportunities that will provide a new momentum to the Bihar growth story. The five expressways are – 407 KM Raxaul-Haldia expressway, 417 KM Gorakhpur-Siliguri expressway, 245 KM Patna-Purnia expressway, 380 KM proposed Buxar-Bhagalpur expressway and 117.37 KM Varanasi-Kolkata expressway.
The ministry of road transport and highway recently approved 10 road projects in Bihar with a budget of Rs 675 crore benefitting several districts of Bihar involving the widening and strengthening of State highways. The centre and state governments have also jointly allotted Rs 48,212 crore for the development of 1030 KM of high-speed corridors, namely Patna-Bettiah, Amas-Darbhanga-Jaynagar, Mokama-Munger-Mirzachowki, Naugachia-Bhagalpur-Hansdiha, Mehranua-Siwan- Mashrakh-Chakia-Sheohra-Sitamarhi-Bhittha Mor and Purneau-Narayanpur-Sahebganj. The Road construction department has allotted a budget of Rs 6,806.53-crore for FY26.
The fast-moving, rapidly evolving connectivity infrastructure will take the State to a new growth trajectory that will be defined by making markets accessible to farmers and businesses, easy commute of people and large-scale creation of jobs. The government focus on industries is also leading to a gradual transformation and the development of roads and connectivity will pave the way for entry of high paying jobs in the service sector in the State.