The Builders Association of India (BAI), representing thousands of contractors across Maharashtra, has issued a legal notice dated June 10th, to the state government over the non-payment of dues worth more than Rs 90,000 crore, warning that it will approach the Bombay High Court if payments are not disclosed and processed within 15 days.
The notice, sent by advocate Anand Pande on behalf of BAI, highlights the financial distress faced by contractors working across departments such as Public Works, Water Supply, Irrigation, and Soil and Water Conservation, as well as those under schemes like the Mukhyamantri Gram Sadak Yojana and Hybrid Annuity Model (HAM) projects.
In the letter, BAI said, “Although my client fully trusts your good selves to do the rightful thing, if there is no disclosure made within 15 days of receiving this letter, my client will have no option but to approach the High Court of Bombay and file a petition."
According to BAI, delayed payment has pushed many contractors into severe debt, with cash credit accounts now being classified as NPAs (Non-Performing Assets)—despite the delays being entirely on the government’s part.
Contractors often take bank loans to start work after receiving tenders and are responsible for paying daily wages and procuring materials. But payments are not released even after the work is completed, despite it being recorded in government Measurement Books (MBs)—official records confirming completion.
“This unjust financial stress must be rectified by restoring the accounts to active status immediately,” the letter states.
The association is demanding the creation of a uniform, transparent, and time-bound disbursement system to ensure that funds, once sanctioned, are fairly distributed to contractors, regardless of the nature or scale of the contract.
BAI also raised concerns that the current ad-hoc and irregular payment system—particularly in HAM projects, where contractors are promised semi-annual payments but receive only 6% to 7% of dues sporadically—is discouraging new entrants from bidding on government contracts.
Moreover, BAI asserted that the issue is not isolated to one department. “The problem is spread across departments and schemes, and contractors are uniformly being told that there are no funds available,” the letter claims. It also emphasized the critical role contractors play in the state and national economy, stating that they are major tax-paying entities and deserve prompt attention from the government. “Their contribution to infrastructure development is unmatched, and their concerns must not be sidelined,” the association said.
