Maharashtra Contractors Face Rs 70,000 Crore Dues Crisis as Payment System Delays Loom
Contractors appointed by the state government in Maharashtra continue to wait for the clearance of long-pending dues, estimated at a staggering Rs 70,000 crore by the Maharashtra State Contractors Association. This financial burden persists as the state budget is scheduled for next month, raising concerns over timely resolution.
Delayed Implementation of TReDS Adds to Contractors' Woes
Even the trade receivables electronic discounting system (TReDS), approved by the cabinet last month to facilitate payments to contractors, has not been implemented, according to the Builders Association of India (BAI). Anand Gupta, immediate past vice-president of BAI, stated that they recently met Chief Minister Devendra Fadnavis to push for an early rollout of the platform, which was approved in late January. "It is essential they launched it at the earliest," Gupta emphasized in a recent interview.
Gupta highlighted that after contractor associations took legal action over non-payment of dues, only 20% of the outstanding amount was released, with no commitment on clearing the remaining balance. "The balance and the burden of interest continue on our members," he added, underscoring the ongoing financial strain.
Protests and Demands for Swift Action
Contractors engaged in departments such as public works, water supply, sanitation, and rural development have been protesting for nearly two years over delayed bill payments. They have now demanded that all departments operationalize the TReDS mechanism promptly to ease liquidity constraints. Further delays in clearing pending dues could force them to halt ongoing infrastructure works, they warned. Additionally, contractors have sought a waiver of GST to alleviate financial pressures.
How TReDS Works and Its Potential Benefits
Under the TReDS system, contractors can raise invoices on an electronic platform, with participating financial institutions making payments. The state government will then repay the financier within one year. This system ensures partial and timely liquidity for contractors while allowing the cash-strapped government to defer immediate outflows from its own coffers.
A public works department official explained, "This system will bring transparency to the billing process, helping contractors expand operations and upgrade technology. Following its successful implementation, the platform will be integrated with e-tendering and e-procurement portals for seamless invoice submission and discounting."
Contractor Concerns Over Delayed Rollout
Contractor associations acknowledge the benefits of TReDS but express frustration over its delayed rollout, which dilutes its immediate impact. One association member noted, "We raised this demand in February 2025 and submitted a proposal. After that, several meetings at the government level were held, and finally, the state cabinet gave its approval. We hope small contractors will be able to get some money out of it."
Background on TReDS Initiative
TReDS is a joint initiative of the Central Government and the Reserve Bank of India, aimed at promoting financial inclusion, Make in India, and Skill India. The electronic platform facilitates financing and discounting of trade receivables for micro, small, and medium enterprises through multiple financiers. These receivables may be due from corporates, government departments, or public sector undertakings.
