In its letter on Friday, the MSCA stated that the state government had cleared around 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. The MSCA, a state-level body representing contractors engaged in development works across departments, highlighted that despite partial payments, arrears have surged again.
“In the last over one-and-a-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 has only paid around Rs 20,000 crore. We had hoped that in March there would be significant payments towards the pending bills, but that did not happen,” the letter stated.
As per the letter, major arrears include Rs 29,000 crore under the Public Works Department, Rs 35,000 crore under the Jal Jeevan Mission and Maharashtra Jeevan Pradhikaran, Rs 6,500 crore for rural development and water conservation works, Rs 3,800 crore under the 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. Pending payments for works executed by local and civic bodies have also affected small contractors, it added.
MSCA president Milind Bhosale warned that contractors would halt work if payments do not begin soon. After March 31, the pending dues have gone up to Rs 96,000 crore, affecting three lakh contractors involved in state government works, Bhosale said.
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. The looming halt in development work underscores the mounting financial strain and signals a potential slowdown in critical infrastructure and public projects across Maharashtra.
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