The Karnataka State Contractors Association has stepped up its demand for the release of pending payments, asking the state government to clear dues estimated at around Rs 38000 crore. The demand comes at a time when the state is facing financial pressure and several development works are reportedly waiting for funds.
The association has written to Chief Minister D K Shivakumar, recalling earlier assurances given to contractors regarding the settlement of their outstanding bills. The contractors said they had been assured that their financial problems would be addressed and pending amounts would be released, but they claim that a substantial portion of the dues remains unpaid.
According to the association, payments connected to development departments have been pending since 2021 and 2022. It has estimated the total outstanding amount at around Rs 38000 crore. The contractors have urged the government to take immediate steps to release the money instead of allowing the dues to remain pending for a longer period.
The association also referred to a meeting held with the state leadership on June 30, 2026. During the meeting, contractors said they were assured that their pending payments would be arranged within two months. They claimed that the government had also indicated that the Finance Department would be asked to make the necessary financial arrangements.
The contractors have now expressed disappointment that the assurances have not resulted in the expected payment process. They said contractors play a major role in executing government infrastructure and development projects across Karnataka and should not be overlooked when funds are allocated for development activities.
The association has also raised concerns about transparency in tendering and payment procedures. It has claimed that, apart from the Public Works Department and Bengaluru civic administration, contractors are facing concerns in other departments regarding the handling of tenders and release of funds.
One of the association’s key demands is that the government should follow seniority while releasing pending bills. The contractors have asked authorities to establish a clear order for payments so that older outstanding amounts are addressed systematically.
The association has also urged the government to reconsider the use of Special Letter of Credit arrangements in the payment process. It has called for a system that provides greater clarity about when and how contractors can expect their bills to be settled.
Another demand concerns the difference in tax payments related to the transition from VAT to GST. The association has asked for the pending eight percent difference amount from the 2017 to 2018 and 2018 to 2019 financial periods to be released at the earliest. It has requested the Chief Minister to recommend the matter to the Finance Department.
The contractors have also questioned an order linked to the Contract Management Module on the e procurement platform. Under the system, project information has to be uploaded to the module before payment can be released through the treasury. The association has requested that this requirement be withdrawn, arguing that it is creating additional difficulties in the payment process.
Local contractors have also sought greater opportunities in district and taluk level works. The association has requested that local contractors receive priority when tenders are issued for projects in their respective areas. It has also asked the government not to encourage contractors from other districts or states at the expense of local firms.
The association said small and medium contractors have faced difficulties since the Covid 19 period. According to the group, administrative problems and delays in government processes have affected their ability to secure new tender works and continue existing projects.
The contractors have therefore requested measures that would help them renew their licences and continue construction activities without further disruption. They have also urged the government to address the financial difficulties faced by contractors who depend heavily on timely payments from public projects.
The latest demand comes amid broader discussions about Karnataka’s financial position. The state government is dealing with spending commitments, development requirements and pressure to strengthen revenue sources. In this situation, contractors argue that clearing pending bills is important for keeping development work moving and supporting businesses connected to government projects.
The Karnataka State Contractors Association has now sought urgent intervention from the Chief Minister and the concerned departments. Its demands cover payment of the reported Rs 38000 crore dues, transparency in fund allocation, priority for pending bills, changes to payment procedures and better opportunities for local contractors.
The association has indicated that contractors across Karnataka are waiting for action on these issues and expects the government to address the pending payments and related concerns.
