Karnataka Contractors Demand Rs 38,000 Crore in Unpaid Bills

The Karnataka State Contractors Association (KSCA) has formally petitioned Chief Minister D.K. Shivakumar for the immediate release of approximately Rs 38,000 crore in pending bills for developmental works. The association reports that 1.50 lakh contractors are in financial distress due to payments being withheld for three to four years, with some debts dating back to 2021-22. The largest outstanding amounts are attributed to the Water Resources department at Rs 14,000 crore and the Loco PWD at Rs 8,370 crore.

Association President R. Manjunath noted that the Chief Minister failed to honor a June 30, 2026, promise to clear outstanding payments within two months. In response to the continued delays, the KSCA is threatening statewide protests and a boycott of government works. Beyond the primary debt, the group is demanding the release of an 8 percent GST difference from 2017-19, the scrapping of the package tender system, and the removal of requirements to upload labor and project details to the Contract Management Module before receiving treasury payments.

These financial disputes coincide with a federal investigation into the Public Works Department's head, Minister Satish Jarkiholi. The Enforcement Directorate recently searched 21 premises across Bengaluru, Belagavi, Gokak, and Kolkata, seizing Rs 3.3 crore in cash and foreign currency as part of a FEMA investigation into alleged undisclosed overseas investments and financial irregularities.