Karnataka contractors in distress over Rs 38,000 crore pending dues

The Karnataka State Contractors Association has written to CM DK Shivakumar, alleging that developmental works worth around Rs 38,000 crore are pending for payment since 2021-22, leaving about 1.50 lakh contractors across the state in distress.

The Karnataka State Contractors Association (R.) has written to Karnataka Chief Minister DK Shivakumar alleging that developmental works worth around Rs 38,000 crore are pending for payment since 2021-22 and contractors are in distress.

In a letter dated September 30, 2026, Association President R. Manjunath and General Secretary J.M. Nandakumar said that about 1.50 lakh contractors across the state have kept faith in the Congress government, which came to power promising to act as per its words. The association said that despite completing works within the deadline, payments have not been released for 3-4 years and contractors are being made to go around offices.

Department-wise Pending Dues

As per the letter, the department-wise pending amounts are as follows: Loco PWD (Locop) has Rs 8,370 crore, Water Resources has Rs 14,000 crore, RDPR has Rs 3,000 crore, Minor Irrigation has Rs 3,600 crore, Urban Development has Rs 1,800 crore, WASH & Waste has Rs 2,600 crore, Karmika has Rs 2,000 crore, and BBMP has Rs 2,600 crore. This brings the total pending amount to Rs 37,980.00 crore.

Key Demands Submitted to Government

Traditionally, governments release pending money during Gauri-Ganesha, Dasara and Deepavali. This government has not released any festival advance so far, the letter said.

The demand to maintain transparency in departments, ensure 80:20 payment pattern; stop Special LOC. Immediately release 8% GST amount for 2017-18, 2018-19 works by recommending to the Finance Department. Withdraw the government order that payment will be made only after uploading labour details on the e-procurement Contract Management Module.

Give priority to local district/taluk contractors for tenders; discourage out-of-district and out-of-state contractors; include in the demand. As per the letter, the demand included extending license renewal and Work done & turnover criteria to 10 years.

Payments for Kalyana Karnataka development works are being made to central KRIDL (Land Army) and other agencies. Hold a technical review meeting on Kalyana Patha works under KKRDB.

In 31 districts, final-stage payments for JJM works are not being released; contractors executing JJM are in huge trouble. In Forest Department tenders, under clause 13(b) and 13(c), officials are allotting works to favourite contractors without following the conditions.

In all development departments, 8-10 works are clubbed into a package tender system, which is inconvenient for local and small contractors. Scrap the package system. Stop the system of calling tenders even when grants are not available, which leads to criticism and pressure on both government and contractors, as per the demands.

Previous Appeals Unresolved

The letter said the association had met Siddaramaiah in March 2023, when he was opposition leader, and on June 30, 2026, after he became CM, and had discussed the issues for over two hours, but no solution has come. It alleged former CM Yediyurappa assigned excess work and created a financial burden.

The association requested the Chief Minister to tour all districts, hear local problems, and take immediate steps to release the pending amount.

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