Karnataka contractors seek ₹38,000 crore in dues, meet CM Shivakumar
Synopsis
Over 1.5 lakh Karnataka contractors are staring at a ₹38,000 crore payment backlog stretching back to 2021-22 — and their association is now at the Chief Minister's door, invoking an unfulfilled two-month promise to clear dues. With allegations of tendering irregularities and legislative interference piled on top, this is shaping up to be a significant governance test for the Shivakumar-led Congress government.
Key Takeaways
The Karnataka State Contractors' Association met CM D.K.
Shivakumar on 2 November 2026 , seeking release of nearly ₹38,000 crore in pending payments.
Around 1.5 lakh contractors and their dependents are reportedly facing financial difficulties due to delays since 2021-22 .
The association reminded Shivakumar of an earlier assurance to clear dues within two months .
Allegations of irregularities in the Karnataka Forest Department 's tender process under Section 13(B) were also raised.
Payment delays flagged in Jal Jeevan Mission , Kalyana Karnataka projects and bills withheld by the Greater Bengaluru Authority .
The association demanded abolition of the package tender system and an end to alleged legislator interference in tendering.
A delegation of the Karnataka State Contractors' Association, led by its President R. Manjunath, met Chief Minister D.K. Shivakumar at his official residence, Krishna, in Bengaluru on Monday, 2 November 2026, urging immediate release of nearly ₹38,000 crore in pending payments owed to contractors across various state government departments since 2021-22. The association warned that around 1.5 lakh contractors and their dependents are facing acute financial hardship due to the prolonged payment backlog.
Key Demands Placed Before the Chief Minister
The delegation submitted a formal representation to Shivakumar outlining a wide range of concerns. At the top of the list was the clearance of pending bills that have reportedly accumulated since 2021-22 across departments. The association reminded the Chief Minister of his earlier assurance that outstanding dues would be settled within two months, and called for immediate follow-through.
Among other demands, the body sought: the release of the 8 per cent VAT-GST differential amount for 2017-18 and 2018-19; withdrawal of the mandatory Contract Management Module requirement for payment releases; an extension of the work experience and turnover eligibility period to 10 years; and abolition of the package tender system.
Allegations of Procedural Irregularities
The association also levelled serious allegations against the Karnataka Forest Department, claiming that works worth thousands of crores of rupees had been awarded under Section 13(B) without following due procedures. It further alleged undue interference by legislators in the tender process — a charge that, if substantiated, could have governance implications for the ruling Congress government in the state.
The contractors urged that no new tenders be floated without confirmed budgetary allocations and that pending bills be cleared before fresh development projects are initiated.
Sector-Specific Payment Bottlenecks
The delegation flagged payment delays in several high-visibility programmes, including the central government's Jal Jeevan Mission projects, funds earmarked for the Kalyana Karnataka development region, and payments allegedly withheld by the Greater Bengaluru Authority. These delays span both Union and state government-funded schemes, complicating resolution.
Officials Present and Next Steps
Senior officials attending the meeting included Chief Minister's Economic Adviser L.K. Atheeq, Additional Chief Secretary Tushar Girinath, and Finance Department Additional Chief Secretary Ritesh Kumar Singh. The contractors' body urged Shivakumar to convene a dedicated meeting with concerned ministers, department secretaries, and senior officials to work toward an early resolution. No formal timeline for payment clearance was announced following the meeting, and the government's official response is awaited.
Point of View
000 crore payment backlog stretching four years is not a clerical delay — it is a structural governance failure that points to misaligned budget commitments and poor contract management. The fact that contractors are invoking an unmet two-month promise from the Chief Minister himself adds a credibility dimension to this crisis that the Congress government in Karnataka cannot easily dismiss. The allegations around Section 13(B) awards in the Forest Department are particularly concerning; if tendering norms were bypassed at scale, the accountability trail leads back to political actors. Until Karnataka stops floating tenders without firm budgetary cover, this problem will compound regardless of how many chief ministerial meetings are held.
NationPress
2 Nov 2026
Frequently Asked Questions
How much in pending dues are Karnataka contractors seeking from the state government?
The Karnataka State Contractors' Association is seeking release of nearly ₹38,000 crore in payments that have been pending across various state government departments since 2021-22. Around 1.5 lakh contractors and their dependents are reportedly affected by the delay.
What did CM Shivakumar previously promise the contractors?
According to the contractors' association, Chief Minister D.K. Shivakumar had earlier assured them that the pending dues would be cleared within two months. The association raised this commitment at the 2 November 2026 meeting, urging him to act on it immediately.
What irregularities did the association allege against the Karnataka Forest Department?
The association alleged that works worth thousands of crores of rupees had been awarded by the Karnataka Forest Department under Section 13(B) without following due procedures. It called for an investigation and corrective action.
Which specific projects have seen payment delays according to the contractors?
The association flagged payment delays in Jal Jeevan Mission projects, funds allocated for the Kalyana Karnataka development region, and payments allegedly withheld by the Greater Bengaluru Authority. These span both centrally and state-funded schemes.
What systemic reforms did the contractors' association demand?
Beyond immediate payment clearance, the association demanded abolition of the package tender system, an end to alleged legislator interference in tenders, no new tenders without confirmed budgetary allocations, an extended eligibility period of 10 years for work experience, and withdrawal of the mandatory Contract Management Module requirement for bill releases.
