The state of Bihar has taken loans worth Rs. 2,000 crores from the market to pay salary hikes and pensions to the employees as per the Sixth Central Pay Commission.

Deputy CM Sushil Kumar Modi said, "Due to implementation of the Sixth Central Pay Commission recommendations, the financial condition of states is under strain." He said that it was mandatory to implement the commission.

Modi who is responsible for the finance portfolio said that they took the loan because the interest rates were likely to pick up. He said that the loan was within the Union Government's prescribed limit of 4 percent of the state GDP, if the state wants to avail the loan waiver scheme. He added that the state could take more loans to support various development programmes.

The total expenditure in the salaries and pensions before the implementation was Rs 11,405 crore. Now it is estimated to be around 16000 crore. The budgetary outlay for the current financial year is Rs. 47,447 crore. Initially the shortfall was 2000 crore but after some time the state finance department estimated it to be 5000 crore, thus increasing the financial pressure on the state.

Economist Saibal Gupta said that the increasing real estate prices and rise in sales of vehicles does not reflect the state's actual financial condition. He further said that the tax revenue from Bihar is very less as compared to other states. While other states collect revenue up to Rs 40,000 crore annually, revenue in case of Bihar is a meager 5000 to 6000 crore. He added that financial projections of Central taxes can be misleading.

Orders have been issued by the government to implement the revised pay structure for the central government employees as per the Sixth Central Pay commission. It has been now decided that these orders would also b extended to employees of autonomous organizations whose pay structure is on a similar pattern of the central employees.