The Karnataka State Contractors' Association on Wednesday, 30 September 2026, alleged that nearly ₹38,000 crore in payments remain pending across eight government departments, warning that if the dues are not cleared by November, it will publicly release documents detailing alleged commission payments made to officials. The association also charged that contractors' funds have been diverted to finance the Congress government's guarantee schemes — an accusation that strikes at the heart of the state's fiscal management debate.

The Core Allegations

Association President R. Manjunath, addressing a press conference in Bengaluru, alleged that commissions demanded from contractors have risen compared to those under the previous government. He further claimed that contractors who paid commissions were being prioritised for bill clearance — effectively creating a two-tier payment system.

Manjunath alleged that Chief Minister D.K. Shivakumar had earlier assured contractors that all pending bills would be cleared by 30 June, a deadline the government reportedly failed to meet. He said both Shivakumar and Public Works Department (PWD) Minister Satish Jarkiholi had personally visited contractors during their earlier agitation and pledged full clearance once the Congress came to power.

The Congress Government and Kempanna Connection

Manjunath drew pointed attention to what he described as political opportunism, recalling how the Congress party leveraged the agitation led by former association president Kempanna against the previous Bharatiya Janata Party (BJP) government over allegations of a 40 per cent commission scandal. “Congress utilised Kempanna during its campaign and used to call him at odd hours. After the Congress government came to power, Siddaramaiah forgot us. He did not help us. We met him several times, but he did not care to respond,” Manjunath alleged.

The remarks are significant: the Congress had built substantial political capital in Karnataka on an anti-corruption platform centred on contractor grievances, and the association is now turning that narrative back on the ruling party.

Guarantee Schemes Under Scrutiny

A central charge levelled by the association is that funds earmarked for contractor payments are being redirected to finance the state government’s flagship guarantee schemes. “We have no connection with the guarantee schemes. The government should arrange funds from other sources and release our money,” Manjunath said. Approximately 1.5 lakh contractors have reportedly been facing financial difficulties for the past four to five years owing to payment delays, he added.

Notably, Karnataka’s guarantee schemes — which include free electricity, subsidised bus travel, and direct cash transfers — have placed considerable pressure on the state exchequer, a tension that critics argue is now spilling over into infrastructure spending.

Forest Department Irregularities and District-Level Agitation

The association also raised a separate concern regarding alleged irregularities in the Karnataka Forest Department’s practice of awarding works under provisions referred to as 13B and 13C — which involve entrustment of works to officials rather than competitive tendering. Manjunath claimed works worth hundreds of crores had been awarded through this route over the past four years, and said the association holds supporting documents. Forest Minister Ramalinga Reddy has reportedly recently halted the practice.

If the government fails to act, the association has announced plans to escalate its agitation at the district level, with contractors undertaking padyatras to the offices of Deputy Commissioners and submitting memoranda. On a conciliatory note, Manjunath acknowledged that PWD Minister Jarkiholi and Minister Krishna Byre Gowda had been relatively cooperative.

What Comes Next

The association’s November ultimatum sets up a high-stakes confrontation with the Congress government at a time when Karnataka’s finances are already under pressure. If the documents allegedly linking officials to commission payments are released, the political fallout could extend well beyond the contractors’ dispute and test the government’s credibility ahead of future electoral cycles.