Contractors seek release of ₹38,000 crore in dues; Karnataka Chief Minister says valid demands will be addressed

D.K. Shivakumar

The Karnataka State Contractors’ Association has urged the government to clear nearly ₹38,000 crore in pending payments for development works. Responding, Chief Minister D.K. Shivakumar said the government was working to bring the situation under control and would address the contractors’ valid demands.

In a representation submitted to the Chief Minister on Monday, the association said bills for works executed since 2021-22 remained unpaid across departments, affecting nearly 1.5 lakh contractors and their dependents.

“There is an outstanding payment of around ₹38,000 crore. They have asked us to settle that amount. Over the last six months, work has been carried out and pending dues have accumulated. Now, we are bringing things under control,” Mr. Shivakumar told presspersons.

The government was holding discussions with Bescom, KPTCL and Energy Department officials. “We have accepted their valid demands and will resolve the issues appropriately,” he said.

Association president R. Manjunath recalled the assurances given during a protest by contractors at Freedom Park on March 6, 2026, when Mr. Shivakumar was Deputy Chief Minister. He had promised to clear the dues in a single instalment, the association said. At a subsequent meeting on June 30, after becoming Chief Minister, Mr. Shivakumar had again assured the association that payments would be released within two months.

The association said the outstanding amount was spread across various development departments and alleged a lack of transparency in tendering and payment processes in several departments.

It urged the government to stop inviting tenders for works without budgetary allocation and to take up fresh development works only after clearing existing dues. It also sought release of payments based on seniority, an end to preferential releases through special Letters of Credit, and scrapping of the package system, which it said disadvantaged small and medium contractors.

Other demands include extending the eligibility period for work experience and turnover requirements to 10 years, releasing the 8% VAT-GST differential for 2017-18 and 2018-19, and clearing pending bills of Jal Jeevan Mission contractors.

The association also sought release of 25% of payments withheld for KRIDL works under the Greater Bengaluru Authority and a review of alleged irregularities in the Forest Department’s award of works under Section 13(B).