Amidst the demand by the Karnataka State Contractors Association (KSCA) to reintroduce the letter of credit (LOC) system that existed in the past, Chief Minister Siddaramaiah on June 23 said his government would completely control the hold of “commission mafia” in government works that has affected the finances of the State.
“The financial indiscipline and the ‘commission mafia’ during the previous BJP government has led to several problems in the State finances,” he said, adding that he would consider releasing pending bills of the contractors after the completion of the Budget session.
He met a delegation of contractors led by KSCA President D. Kempanna in Bengaluru on Friday. He also promised that following the Budget session, he would convene a meeting of Finance Department and BBMP officials to sort out the pending bills issue.
Reintroduction of Letter of Credit system
Incidentally, Mr. Kempanna had levelled allegations of 40% commission in government works during the previous BJP government. The Congress had led their Assembly election campaign attacking the BJP on these allegations.
On Friday, the contractors’ delegation urged the Chief Minister to reintroduce the LOC system that existed during the previous Congress regime between 2013 and 2018. It also urged the government to give first preference to contractors from Karnataka while implementing public works in the State. According to Mr. Kempanna bills worth about ₹3,500 crore were pending for clearance with the BBMP.
Mr. Siddaramaiah said that contractors in the State are in trouble due to the BJP government’s financial indiscipline, and that he would require some time to address the problem. He assured the delegation that preference would be given to contractors from Karnataka.
