Contractors demand ₹38,000 crore pending since 2021
Karnataka State Contractors Association writes to CM DK Shivakumar over ₹38,000 crore in pending bills since 2021.
The Karnataka State Contractors Association (R.) has officially reached out to Chief Minister DK Shivakumar, highlighting a massive financial crisis facing the state's construction sector. In a formal letter, the association revealed that developmental works worth approximately ₹38,000 crore have had their payments pending since the 2021-22 period, leaving contractors in extreme distress.
A massive debt burden on contractors
Association President R. Manjunath and General Secretary J.M. Nandakumar stated that roughly 1.50 lakh contractors across Karnataka have placed their trust in the current Congress government, expecting the administration to fulfill its promises. Despite completing various developmental projects within the stipulated deadlines, contractors claim they have been forced to navigate through endless bureaucratic circles for the last 3 to 4 years without receiving their due payments.
The association provided a detailed breakdown of the outstanding dues across various departments, totaling ₹37,980 crore:
- Water Resources: ₹14,000 crore
- PWD (Locop): ₹8,370 crore
- Minor Irrigation: ₹3,600 crore
- RDPR: ₹3,000 crore
- BBMP: ₹2,600 crore
- WASH & Waste: ₹2,600 crore
- Karmika: ₹2,000 crore
- Urban Development: ₹1,800 crore
Demands for transparency and relief
The association has presented a list of urgent demands to the Chief Minister to alleviate the mounting pressure on the industry. They have requested the government to maintain departmental transparency and implement an 80:20 payment pattern. Furthermore, they have urged the administration to stop the Special LOC system and immediately release the 8% GST amount for works completed during 2017-18 and 2018-19 by making recommendations to the Finance Department.
Additional demands include:
- Local Priority: Prioritizing local district and taluk contractors for tenders instead of out-of-state firms.
- Scrapping Package Tenders: Ending the practice of clubbing 8-10 works into a single package, which disadvantages small and local contractors.
- JJM Payments: Addressing the lack of final-stage payments for Jal Jeevan Mission (JJM) works in 31 districts.
- Licensing Reform: Extending license renewal and turnover criteria to 10 years.
- Policy Changes: Withdrawing the order requiring labor details to be uploaded on the e-procurement Contract Management Module before payment.
Unresolved grievances despite multiple meetings
The association noted that they had previously met with Siddaramaiah in March 2023 when he was the Leader of the Opposition. A subsequent meeting was held on June 30, 2026, after he assumed the office of Chief Minister. Despite discussions lasting over two hours, the contractors claim no concrete solutions have been provided.
The letter also alleged that the previous administration under former CM Yediyurappa had assigned excessive work, creating a significant financial burden. The association has urged Chief Minister DK Shivakumar to tour the various districts to personally hear the local grievances and take immediate steps to release the long-overdue funds.