Maharashtra Contractors Threaten to Halt Govt Projects Over ₹96,000 Crore Pending Dues

The Maharashtra State Contractors' Association has renewed its warning to halt development works across the state from April 7 if pending dues of over ₹96,000 crore are not cleared, even as the state government has defended the delay citing severe fiscal constraints.

The association stated that despite partial payments of around ₹20,000 crore last year, fresh bills from ongoing and completed projects have pushed total outstanding dues back to nearly ₹96,000 crore. Over three lakh contractors are reportedly affected, with many facing acute financial distress due to prolonged delays .

Major arrears are spread across departments, including ₹29,000 crore under the Public Works Department, ₹35,000 crore linked to the Jal Jeevan Mission and Maharashtra Jeevan Pradhikaran, and thousands of crores pending in water resources , rural development , tourism , and urban development sectors.

Responding to the contractors’ warning, state government officials have pointed to a tight fiscal situation as the primary reason for delayed payments. According to officials, Maharashtra is currently facing a cash flow mismatch , driven by a combination of high expenditure and lower-than-expected revenue collections .

A key factor behind the strain is the significant rise in welfare spending . The government had rolled out major schemes in 2024, including the Ladki Bahin scheme, which alone accounts for ₹36,000 crore, along with ₹14,700 crore allocated for free electricity to farmers. These commitments have substantially increased the burden on the state exchequer .

Officials also indicated that priority is being given to mandatory expenditures , such as salaries, pensions, subsidies, and interest payments, leaving limited room for clearing contractor dues immediately. Additionally, a shortfall in tax and non-tax revenue has further constrained available funds.

Despite borrowing nearly ₹1.38 lakh crore in the previous financial year, the state’s capital expenditure stood at ₹98,000 crore, reflecting limited fiscal space . Sources suggest that while the government is exploring phased payments , liquidity pressures have delayed immediate large-scale disbursements .

MSCA president Milind Bhosale maintained that contractors can no longer sustain operations under such conditions and reiterated that work across sectors including roads, irrigation, and rural infrastructure will be stopped if payments are not initiated soon.

With no concrete assurance yet from the government, the standoff threatens to escalate into a statewide disruption, potentially impacting critical infrastructure projects ahead of the monsoon season.