On July 17, 2025, Bihar Chief Minister Nitish Kumar made a landmark pre-poll announcement providing significant economic relief to millions of households. This policy, formalised by the Cabinet on July 18, 2025, marks a shift in the state’s energy strategy toward total domestic subsidy and renewable integration.
1. The Free Electricity Scheme
- Effective Date: August 1, 2025 (reflecting in the July 2025 usage cycle).
- Benefit: 125 units of free electricity per month for all domestic consumers.
- Scope: Covers 1.67 crore (16.7 million) families, which accounts for approximately 90% of the state’s domestic power base.
- Subsidy Structure: * Pro-Rata Model: Unlike other states, where exceeding the limit voids the subsidy, Bihar consumers only pay for units above 125. For example, if you consume 150 units, you only pay for 25 units at a subsidised rate.
- Charges Waived: Includes 100% waiver of Energy Charge, Fixed Charge, and Electricity Duty for the first 125 units.
2. Solar Integration & “Kutir Jyoti” Expansion
To offset the massive subsidy burden, the government is launching a 3-year “Solarisation” mission:
- Target Capacity: 10,000 MW of solar energy in 3 years.
- Mechanism: Installation of 1.1 KW rooftop solar panels or nearby public solar plants with consumer consent.
- Kutir Jyoti Scheme: For the 58.89 lakh extremely poor (BPL) families, the State Government will bear 100% of the installation cost.
- General Consumers: Will receive financial assistance/subsidies (bridging the gap after the PM Surya Ghar Muft Bijli Yojana central subsidy).
3. Financial Implications
The state’s power subsidy bill is set to experience a significant jump:
- Current Subsidy (FY 2024-25): ₹15,995 Crore.
- Additional Burden: ₹3,797 Crore.
- New Total Annual Subsidy: ₹19,792 Crore.
- Administrative Oversight: The Bihar State Power Holding Company Ltd (BSPHCL) is the nodal agency for implementation.
4. Strategic & Political Context
- Election Strategy: The announcement comes just months before the November 2025 Bihar Assembly Elections.
- Counter-Promise: This move directly counters the RJD’s promise of 200 units of free power.
- Image Building: New electricity bills will feature the CM’s photograph to ensure the “Mukhya Mantri Vidyut Upbhokta Sahayata Yojana” (MVUSY) branding reaches every household.