Bengaluru, February 18, 2026 – In a sharp escalation of the ongoing dispute over massive pending payments, the Karnataka government has reportedly told civil contractors to halt work if they choose, asserting that payments will be made strictly according to the state's budgetary provisions.
The remark came amid mounting pressure from the Karnataka State Contractors’ Association (KSCA), which has threatened to stop all ongoing government projects and launch statewide protests starting March 5 if the government fails to clear outstanding bills totaling over ₹37,370 crore.
Deputy Chief Minister D.K. Shivakumar, who also holds the portfolio related to public works and infrastructure in some capacities, is understood to have conveyed the government's position in response to the contractors' demands. Sources indicate the statement was along the lines of: “Let the contractors file a complaint in this regard. Let them stop the work over the non-payment of more than Rs 30,000 crore in pending bills,” with the government emphasizing that releases would align with available budget allocations rather than immediate full clearance.
The KSCA, led by state president R. Manjunath, has repeatedly highlighted that pending dues span multiple departments, including:
- Water Resources/Public Works: Highest share, with figures cited around ₹13,000 crore in some reports
- Rural Development and Panchayati Raj: ₹3,800 crore
- Minor Irrigation: ₹3,000 crore
- Urban Development: ₹2,000 crore
- Others (Housing, Wakf, Labour, Mines and Geology): Additional thousands of crores
Contractors allege severe financial distress, claiming many have taken loans, pledged assets, or faced business closures due to delayed payments dating back to works executed in previous financial years (2022-23 onward). The association has also raised concerns over alleged higher "commission" or kickback demands compared to the previous BJP regime for processing bills, though specific percentages remain unproven in public statements.
The contractors' body has sought an urgent meeting with Chief Minister Siddaramaiah (who also holds the Finance portfolio) for a phased clearance timeline and priority in the upcoming state budget, expected in the first week of March 2026. Despite earlier assurances from ministers and Deputy CM Shivakumar, no concrete action has materialized, prompting renewed threats of a full work stoppage and a major protest at Freedom Park in Bengaluru on March 5.
Opposition leaders, including Leader of Opposition R. Ashoka, have seized on the issue to criticize the Congress-led government, describing the non-payment as a sign of "fiscal collapse" and warning of stalled projects, job losses, and broader economic slowdown in the state.
The government's apparent stance—that payments will follow budgetary discipline—signals limited immediate relief for contractors ahead of the budget session. This has intensified calls from the KSCA for intervention from national Congress leaders, including Rahul Gandhi and AICC president Mallikarjun Kharge, as well as the state Governor.
As the budget preparations intensify, the standoff could disrupt ongoing infrastructure projects across Karnataka if the contractors follow through on their threats, potentially impacting development timelines and public services in the state. Both sides remain at an impasse, with contractors vowing to escalate if their demands are not met soon.
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