Maharashtra contractors' body threatens to stop work on govt projects over Rs 96k crore pending dues

Mumbai: The Maharashtra State Contractors' Association wrote to the Mahayuti government on Friday threatening to stop work from April 7 if dues amounting to more than Rs 96,000 crore are not paid soon.

The state government had cleared about Rs 20,000 crore last year following protests, but fresh bills from ongoing and completed works have pushed the total pending amount back to Rs 96,000 crore, said the MSCA, a state-level body representing contractors engaged in development works across departments.

"In last over one-and-half years, the pending bill amount went up to Rs 1.16 lakh crore. Now it is around Rs 96,400 crore, which means the state government only paid around Rs 20,000 crore. We hoped that in March there would significant payment towards the pending bills but it didn't happen," the MSCA letter said.

Major arrears include Rs 29,000 crore under the Public Works Department, Rs 35,000 crore under Jal Jeevan Mission and Maharashtra Jeevan Pradhikaran, Rs 6,500 crore for rural development and water conservation works, Rs 3,800 crore under Maharashtra Tourism Development Corporation, Rs 2,100 crore for urban development special fund works, Rs 9,000 crore under the water resources department, and Rs 11,000 crore under district development plans, it said.

Pending payments for works executed by local and civic bodies have also affected small contractors, it said.

Contractors would halt work if payments do not begin soon, MSCA president Milind Bhosale said.

After March 31, the pending dues have gone up to Rs 96,000 crore, which has affected three lakh contractors involved in state government works, Bhosale added.

The state government has been facing a cash crunch due to high expenditure on welfare schemes and a shortfall in revenue collection.

Pressure on state finances increased in 2024 when the then Mahayuti government announced several welfare measures ahead of the assembly elections, including a provision of Rs 36,000 crore for the Ladki Bahin scheme and Rs 14,700 crore for free power to farmers.

Despite borrowings of Rs 1.38 lakh crore in the last financial year, the capital expenditure stood at Rs 98,000 crore, reflecting stress on the state's fiscal position, officials said.