Maharashtra Contractors Threaten Work Halt Over INR 96,000 Crore Pending Dues
The Maharashtra State Contractors' Association has issued a stern warning to the state government, stating that contractors will suspend work across projects from April 7 if pending payments exceeding INR 96,000 crore are not addressed. The development, communicated through a formal letter submitted in the past week, highlights mounting financial stress across the construction sector linked to delayed payments for completed and ongoing works.
According to the association, the total pending dues had risen to around INR 1.16 lakh crore over the past one-and-a-half years before partial payments reduced the figure. However, despite disbursements of approximately INR 20,000 crore in the previous year following earlier protests, the outstanding amount has again increased to about INR 96,400 crore due to continued billing from active projects. The association indicated that expectations of higher payments towards the end of the financial year were not met.
The pending dues are distributed across several government departments and schemes. The Public Works Department accounts for approximately INR 29,000 crore, while the Jal Jeevan Mission and Maharashtra Jeevan Pradhikaran together account for around INR 35,000 crore. Additional arrears include INR 6,500 crore linked to rural development and water conservation works, INR 3,800 crore under the Maharashtra Tourism Development Corporation, INR 2,100 crore related to urban development special fund works, INR 9,000 crore under the water resources department, and INR 11,000 crore associated with district development plans.
The association has stated that delayed payments have affected contractors across scales, including those executing works for local bodies and civic authorities. Smaller contractors, in particular, are facing liquidity constraints, which are impacting their ability to sustain operations and continue project execution. The association indicated that around three lakh contractors engaged in state government projects have been affected by the payment delays.
The warning comes amid broader fiscal challenges faced by the state government. Officials have indicated that increased expenditure on welfare schemes and lower-than-expected revenue collections have placed pressure on finances. Significant allocations in recent years, including INR 36,000 crore for the Ladki Bahin scheme and INR 14,700 crore for free power to farmers, have contributed to rising expenditure commitments.
In addition, the state undertook borrowings of approximately INR 1.38 lakh crore in the previous financial year, while capital expenditure stood at around INR 98,000 crore, indicating a constrained fiscal position. These factors have contributed to delays in releasing payments for infrastructure and development works.
The potential halt in construction activity, if implemented, could affect a wide range of infrastructure projects across Maharashtra, including roads, water supply systems, irrigation works, and urban development initiatives. The situation underscores the linkage between public finance management and project execution timelines, particularly in sectors dependent on government funding.
