Amid severe funding constraints and increasing delays in payments to contractors, the Maharashtra Cabinet on Tuesday approved the use of Trade Receivables Electronic Discounting System (TReDS) platform to clear dues of contractors engaged by the Public Works Department.
The decision comes amid sustained protests by contractors of PWD, Water Supply, Sanitation Department and Rural Development Department over non-payment of bills for almost two years. Contracting agencies have repeatedly warned of disruption of ongoing work and have also demanded exemption from GST to enable them recover pending dues. The Maharashtra State Contractors Association, the umbrella body for contractors across the state, has estimated the total outstanding payments at around Rs 70,000 crore.
Under the TReDS mechanism, contractors will be able to issue their invoices on the electronic platform, after which participating financial institutions will make payments to them. The state government will reimburse the financier within one year. Although the system guarantees partial and timely liquidity for contractors, it also allows the state government, with liquidity problems, to postpone the immediate withdrawal of its own coffers.
TReDS is a joint initiative of the Government of India and the Reserve Bank of India aimed at promoting financial inclusion, Make in India and Skill India. The electronic platform facilitates the financing and discounting of commercial receivables of Micro, Small and Medium Enterprises (MSMEs) through multiple financiers. These accounts receivable may be owed to companies, government departments or public sector companies. With Cabinet approval, contractors engaged by PWDs of the Maharashtra government will now be included under the TReDS framework.
“This system will bring transparency to PWD’s billing process, helping contractors scale up operations and upgrade technology. Upon successful implementation, the platform will be integrated with e-tendering and e-procurement portals for seamless invoice submission and discounting,” a PWD official said.
Welcoming the move, Maharashtra State Contractors Association president Milind Bhosle said the demand to adopt TReDS had been pending for over a year. “We raised this demand in February 2025 and even submitted a proposal in this regard. Then several meetings were held at the government level and finally the Council of Ministers gave its approval. We hope that small contractors can make some money from it,” he said.
