Suppliers demand release of ₹38,000 crore dues; Karnataka Chief Minister says valid demands will be addressed

DK Shivakumar Photo Credit: File photo

The Karnataka State Contractors Association has urged the government to clear nearly ₹38,000 crore in outstanding payments for development works. In response, Chief Minister DK Shivakumar said the government was working to bring the situation under control and would address the valid demands of the suppliers.

In a statement submitted to the chief minister on Monday, the association said bills for works carried out from 2021 to 2022 remained unpaid across departments, affecting nearly 1.5 million contractors and their dependents.

“There is an outstanding payment of around ₹38,000 crore. We have been asked to settle this amount. Work has been done in the last six months and outstanding dues have accumulated. Now we are bringing things under control,” Mr Shivakumar told reporters.

The government held talks with officials from Bescom, KPTCL and the Ministry of Power. “We have accepted their valid demands and will resolve the issues accordingly,” he said.

Just an assurance

Association President R. Manjunath recalled the assurances given during the contractors’ protest at Freedom Park on March 6, 2026, when Mr. Shivakumar was Deputy Chief Minister. He promised to pay the fees in a single installment, the association said. In a subsequent meeting on June 30, after becoming Chief Minister, Mr. Shivakumar again assured the association that the payments would be released within two months.

The association said the amount owed was distributed among various development departments and alleged that there was no transparency in the process of tenders and payments in several departments.

She urged the government to stop calling tenders for works without budget allocation and to start new development works only after clearing the existing dues. It also sought to free up payments based on seniority, end preferential release through special letters of credit and abolish the package system, which it said disadvantaged small and medium-sized contractors.

Other requirements

Other demands include extension of eligibility period for work experience and turnover requirements to 10 years, release of 8% VAT-GST differential for 2017-18 and 2018-19 and clearance of Jal Jeevan mission’s outstanding supplier bills.

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

Published – 02 Nov 2026 21:13 IST