MUMBAI: With local body elections around the corner, the state government has begun to clear dues owed to contractors executing government schemes across the state. The dues amount to a whopping ₹89,000 crore, and holding back payments any longer would risk protests and disruption in development work that could spell trouble for the Mahayuti government in the upcoming polls. The government has thus begun to release payments, amounting to around ₹10,000 crore.
Recently, slain hostage taker Rohit Aarrya had claimed the state education department owed him over ₹2 crore. However, the government maintains that Aarrya’s claim was baseless. The department had floated a scheme called Mukhyamantri Majhi Shala Sundar Shala with an allocation of ₹2.4 crore. Aarrya had claimed the scheme was based on an idea he had floated and he should be allotted funds. However, the government said Aarrya had not submitted documents to support his claim and they owed him nothing.
Insisting that the government owed him money, Aarrya recently took 17 children hostage in Mumbai. He was shot dead by the police while the hostages were being rescued.
Meanwhile, clearing the contractors’ payments is proving tricky. The raft of populist schemes announced by the Mahayuti coalition government before it was re-elected last year has put the state in a financial bind. Its flagship Ladki Bahin scheme alone created huge liabilities, slamming the brakes on routine expenditure such as payments for projects under government schemes.
As a result, government contractors have been protesting non-payment of dues for the last 18 months. Of the outstanding payments of ₹89,000 crore, dues by the Public Works Department are around ₹46,000 crore; Jal Jeevan Mission ₹12,000 crore, rural development department ₹8600 crore, etc.
Worse, the central government has not released funds for the Jal Jeevan Mission in Maharashtra since October 2024 and two contractors died by suicide since July this year.
Officials from the state finance department said the state has begun releasing funds for ongoing expenditure and to clear dues. “We have released funds for several departments amounting to ₹10,000 crore. Besides civil works and projects, we released ₹28 crore for the Shiv Bhojan scheme on Friday,” said an official.
Milind Bhosale, president of the Maharashtra State Contractors’ Association, acknowledged that payments are being processed. “For the last one and half years, we have been struggling to get our bills paid. In the last three weeks, the government released around ₹6,700 crore for the public works department, ₹1,300 crore for works done for the rural development department, and ₹1,944 crore for Jal Jeevan Mission works,” said Bhosale.
He said the state has promised to soon release payments for maintenance and repair works undertaken during the last 10 months, amounting to over ₹150 crore.