Rs 38,000 Crore Unpaid: Karnataka's Contractors Just Gave the CM an Ultimatum, and It Isn't Polite

Imagine finishing a job, handing over the keys and then waiting years to be paid. Now multiply that by thousands of contractors and a bill that runs into crores. That's the mood in Karnataka right now.

And on Wednesday, September 30, 2026, the mood boiled over into a press conference, a letter to the Chief Minister and a very loud warning.

The Bills Nobody's Paying 

The big number

The Karnataka State Contractors Association says roughly Rs 38,000 crore in payments are pending across eight government departments, and that some of those works date back to 2021-22. President R Manjunath even claimed the real figure could be a couple of thousand crore higher. In a letter dated September 30, the association put the exact total at Rs 37,980 crore.

Let me be honest, numbers like that stop meaning anything after a while. So here's the department-wise breakdown from the letter.

Department Pending dues (approx.)
Water Resources Rs 14,000 crore
Public Works (PWD) Rs 8,370 crore
Minor Irrigation Rs 3,600 crore
RDPR Rs 3,000 crore
WASH and Waste Rs 2,600 crore
BBMP Rs 2,600 crore
Karmika Rs 2,000 crore
Urban Development Rs 1,800 crore
Total Rs 37,980 crore

Jal Jeevan and other sore spots

The letter also flagged that final payments for Jal Jeevan Mission works haven't been released in 31 districts. And contractors want local district and taluk firms to get priority for tenders, with out-of-district and out-of-state players discouraged. Payments for Kalyana Karnataka works, they say, are going to central agencies like KRIDL instead.

Here's the thing. This isn't a new fight. The association says the Congress government has been in office for nearly three years, and a big chunk of the money is still stuck.

The Ultimatum and the Explosive Claims 

What they're threatening

The contractors want a meeting with Chief Minister DK Shivakumar. If that doesn't happen, Manjunath says they'll hold padyatras to Deputy Commissioners' offices and submit memoranda. And there's a clock ticking. Reports on the deadline differ a bit, with PTI and IANS saying November and another report saying December. Either way, it's close.

If dues aren't cleared by then, the association says it'll release documents related to bribes paid as commissions.

The commission allegation

That's where it gets interesting. Manjunath alleged that the commission being demanded to clear payments is now higher than under the previous BJP government. He refused to name a percentage, though, and said the CM should let them reveal everything.

He also claimed that contractors who pay commissions get their bills cleared first, and that money meant for contractors is being diverted to fund the state's guarantee schemes. The association's line, roughly, is that for any project from Rs 1 crore to Rs 100 crore, contractors have to speak to MLAs first, and they asked whether the CM doesn't know this.

Now, these are allegations from one side, and the contractors haven't publicly put evidence on the table yet. So treat them as claims, not findings. But a threat to release documents tells you how frustrated they are. 

Shivakumar's Answer: Blame the Previous Government 

"Too many contracts"

The Chief Minister's response, in short, was to point at the BJP. Shivakumar blamed the previous government for handing out too many contracts, which left the current one holding a huge pile of commitments. He also said he's thinking about ways to resolve the issue.

It's a line we've heard from him before. Earlier, when he was Deputy CM, he explained that the departments under him had around Rs 1.2 lakh crore worth of work in progress against a budget of only Rs 16,000 crore, with just Rs 5,000 crore or so releasable at a time. He said payments were going out on the basis of seniority, and that Rs 5,300 crore expected from the Centre for the Upper Bhadra project hadn't arrived either.

Why that explanation only goes so far

Point Contractors' side Government's side
Cause of the backlog Repeated assurances, no payments Too many contracts handed out earlier, limited budget
Commissions Higher now than before (alleged) No response reported yet on this
Fix Clear all Rs 38,000 crore Looking for ways, pay by seniority

But let me push back a bit. Blaming the past works for a while. After three years in power, it sounds thinner each time. Shivakumar himself had reportedly promised contractors their bills would be cleared by June 30, and that date has come and gone. And Manjunath pointed out that the CM held the major irrigation department until recently, the very department with the biggest dues at Rs 14,000 crore.

Because that's the trouble with inherited problems. They stay inherited only until you've had enough time to fix them.

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