The recent Statewide protests by contractors and sub-contractors against the inordinate delay in the clearance of pending bills is a precedent of sorts as they had never taken to the streets before seeking payments for works executed by them. Their plight reflects the dire straits in which the government is mired due to various extraneous factors, which mainly include COVID-19 pandemic and the financial crunch faced by it since bifurcation of the unified State of Andhra Pradesh (A.P.).
The alleged non-uploading of bills into the Comprehensive Financial Management System (CFMS) portal, not to speak of budget release orders, is the stumbling block, say a section of contractors. They urge the Chief Minister Y.S. Jagan Mohan Reddy to make payments in a phased manner, in view of the government’s precarious financial position.
Small operators
A large number of these contractors are small operators and some of them are desperate to recover dues as little as ₹1 lakh but the government is left with few avenues to clear the bills in a short period. Most of the works done by them are the ones awarded by the Roads & Buildings, Public Health and Water Resources Departments.
“Our bills have been pending for the last three years. We agree the government has its own difficulties but we can’t stretch ourselves beyond a limit either. The bills outstanding on building works are under ₹1,000 crore. It should not be a problem to clear it in instalments,” observes a building contractor. The value of works done in cities and towns does not exceed ₹25 lakh apiece.
Another contractor expresses regret that the service tax exemption on some works was done away with in 2015 and they are now forced to pay dues thereof which amount to at least ₹1 crore each in most cases.
“We (contractors) have no intention to avoid paying the taxes. The government must be knowing that it (paying our tax dues) is not possible without having money in our hands. We ought to have money in rotation to reinvest in the government works and pay statutory dues. We are hoping that the government will adopt a give-and-take approach which is good for both,” says a contractor while appealing to the Chief Minister to consider extending financial assistance to them under the Navaratnalu scheme. He claims that contractors are forced to even mortgage their properties to keep the works going.
Most of the bills pending are related to the works done under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). A recent High Court order directed the government to pay the dues along with 12% interest. Even as the government is looking for ways to wriggle out of the crisis, it is said that at least 30 contractors have either died or committed suicide in the last three years due to the tremendous stress on them to make payments to workers and material suppliers.
‘Limited means’
Speaking to The Hindu , Finance Minister Buggana Rajendranath Reddy admits that contractors indeed had a tough time but the government does not have much leeway to take quick action. He pegs the total bills pending for works and services at about ₹40,000 crore and claims to have settled a major portion of it even as new ones are added up.
The Minister alleges that various works were taken up without any financial closure by the time the YSR Congress Party came to power. For instance, contracts for works valued at nearly ₹50,000 crore were tendered in Amaravati (capital city works) alone but a sum of only ₹5,000 crore was actually tied up.
“The ‘sizeable concentration’ on welfare during the COVID-19 pandemic is another thing which critics should understand. We took a conscious call to put money in the hands of the public, particularly the poor who were forced to live at subsistence level. This was one of the things that tied our hands,” Mr. Rajendranath Reddy observes and asserts that the government is doing its best to bring contractors’ troubles to an end in earnest.
