At a time when the government is running from pillar to post to meet the financial challenges of implementing the five pre-poll guarantees announced by Congress, CM Siddaramaiah, who holds the finance portfolio, is left scrambling for funds to clear mounting dues to the tune of Rs 36,784 crore, including Rs 25,000 crore owed to civil contractors and Rs 8,584 crore to electricity supply companies.

With Siddaramaiah set to present the budget on July 7, these dues pose a huge challenge for him as he has to generate additional resources with politically significant sections such as Streeshakti self-help groups and farmers demanding that their outstanding loans be waived by the government.

Sensing the seriousness of the issue, the finance department on Wednesday issued a circular, asking all departments, boards, and corporations to release funds to clear pending bills, after verification of the veracity of the claims.

The chief minister’s office said the government has already found certain irregularities and it will need more time for further verification. There is also a proposal to set up a special investigation team (SIT) to probe such claims.

The Congress government has a political obligation to clear the pending dues of civil contractors since their complaint against the erstwhile BJP government over allegations of 40% kickbacks in procuring government contracts had helped the grand old party gain considerable traction with the electorate in the recent assembly polls. Congress’ successful PayCM campaign was based on the contractor associations’ complaint to Prime Minister Narendra Modi about allegations of rampant corruption in the BJP-led state government.

While one of the main concerns of contractors is the pending bills for the work done, a delegation led by D Kempanna, president of the Karnataka State Contractors’ Association, met the chief minister last week and urged him to ensure sufficient budget allocation to clear their dues. According to Kempanna, the dues have mounted to about Rs 25,000 crore.

“The government departments owe us more than Rs 25,000 crore. While the highest amount is due from the water resources department, we are still validating the figures. We have even called a meeting of the contractors to ascertain the exact figure,” Kempanna said.

“The previous government had issued work orders worth about Rs 1 lakh crore in the water resources department, while the allocation for the department itself was a mere Rs 25,000 crore. So, we need to investigate the cases thoroughly, but the government is committed to clearing dues that are genuine,” said Naseer Ahmed, political secretary to the CM.

He said all payments were put on hold after the new government took over. For instance, Rs 100 crore is owed to casual laborers in the energy department alone. “The chief minister has sympathetically received all these pleas. While the prevailing financial situation is not conducive to meeting all the demands, he will look into them on a priority basis,” said Ahmed.

Congress functionaries had assured that the party would waive loans availed by Streeshakti groups if it came to power. There are 1.3 lakh groups with ten members each, and the loans amount to Rs 2,200 crore. “We want the CM to fulfill the promise by setting aside the required money in the budget to waive loans of Streeshakti groups,” said HK Narayana Gowda, vice-president of Karnataka Raitha Sangha-Hashiru Sene.