Karnataka State Contractors' Association President R Manjunath (Left), Karnataka CM DK Shivakumar (Right)
BENGALURU: The Karnataka State Contractors’ Association has urged the state government to immediately release the estimated Rs 38,000 crore in pending payments to contractors, expressing strong dissatisfaction over what it described as repeated assurances without corresponding action.
In a letter addressed to Chief Minister D.K. Shivakumar, the association recalled the assurances given to the contracting community before and after the Congress government came to power. It said Shivakumar, when he was Deputy Chief Minister, had assured contractors that the government would stand by them and clear their pending bills in a single instalment.
The association said nearly three years had passed since the government assumed office, but a substantial portion of contractors’ dues remained unpaid. It alleged that repeated representations and meetings with the government had not resolved their financial problems satisfactorily.
According to the association, Shivakumar met its office-bearers on June 30, 2026, after becoming Chief Minister, and assured them that their pending bills would be cleared within two months. The association said the Chief Minister had also indicated that the Finance Department would be asked to make the necessary financial arrangements.
The contractors said Shivakumar had been touring different districts and addressing local issues. Still, they alleged that the contracting community, which executes a major share of development works in the state, had not received similar attention.
The association claimed that around Rs 38,000 crore was pending across various development departments, with bills relating to works executed since 2021-22 remaining unpaid. It said the prolonged delay had placed a severe financial burden on contractors and those dependent on the construction and infrastructure sector.
The association also raised concerns over what it described as a lack of transparency in tendering and payment procedures in several departments. It said the Public Works Department and the Greater Bengaluru Authority were exceptions in certain respects, while alleging that other departments needed to improve transparency in the tendering and bill-payment process.
Among its demands, the association asked the government to urgently release the entire pending amount of Rs 38,000 crore in accordance with the Chief Minister’s earlier assurance. It also sought a system under which payments would be released according to the seniority of pending bills, rather than through what it described as discretionary arrangements.
The association further urged the government to stop issuing Special Letters of Credit (Special LOCs), arguing that payment procedures should remain transparent and follow an established priority system.
Another demand concerned the difference in tax payments dating back to 2017-18 and 2018-19. The association sought the early release of the eight per cent GST-related difference amount and requested the Chief Minister to direct the Finance Department to take necessary action.
The contractors also opposed an order linking treasury payments to the uploading of project details on the Contract Management Module of the e-procurement platform. The association requested the government to withdraw the requirement that project information must first be uploaded on the module before payments can be released from the treasury.
The association also called for greater preference to local contractors at the district and taluk levels. It urged the government to ensure that local contractors receive opportunities in tenders and requested that contractors from outside Karnataka and outside the district should not be given undue preference.
The contractors said small and medium-sized firms were particularly affected by the financial difficulties that emerged during the Covid-19 pandemic and by what they described as administrative delays and irregularities in the government system.
According to the association, many small and medium contractors have struggled to secure fresh works because of the continuing uncertainty surrounding payments and tender processes. The prolonged delay, it said, had affected their ability to meet financial commitments, retain workers and continue ongoing projects.
The association also appealed to the government to provide relief concerning renewal of contractor licences and enable eligible contractors to continue executing works without further administrative hurdles.
The contractors said timely payment of pending bills was essential not only for the survival of individual firms but also for the continuation of infrastructure and development projects across Karnataka. Delays in clearing bills, they argued, could have a wider impact on construction activity, employment and the financial stability of businesses dependent on government projects.
The association has therefore sought immediate intervention from Chief Minister D.K. Shivakumar on the pending payments, tendering procedures, tax-related dues and other issues raised in its representation.
