The Associated Chambers of Commerce and Industry of India (Assocham), a major Indian trade association, has pleaded with the government to clear outstanding dues to its contractors so that the Jal Jeevan Mission can continue unhindered.
In a letter to the Ministry of Jal Shakti last month, the industry body said, “Assocham wishes to bring to your kind attention an urgent matter of nonpayment of certified contractor bills, pending for over 10-12 months, which is severely impacting ongoing works under this flagship programme”.
Jal Jeevan Mission was envisioned to provide safe and adequate drinking water to households in rural India through individual household tap connections.
In its letter, the industry body pleaded that despite sufficient central allocations, payments remain unsettled in several states including Uttar Pradesh, Madhya Pradesh, Jharkhand, Odisha, West Bengal, Maharashtra, Assam, and Jammu & Kashmir, where dues amounting to tens of thousands of crores have remained unpaid for months.
In FY25, for instance, over ₹11,000 crore in dues are pending in Uttar Pradesh alone, ₹3,800 crore in Jharkhand, ₹2,500 crore in Odisha, ₹5,000 crore in West Bengal and around ₹12,500 crore in Maharashtra, said the letter.
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This has led to a drop in the annual pace of new connections by nearly 70 per cent nationally, with new connections dropping from 2.99 crore in 2023-24 to only 0.94 crore in 2024-25.
“Such prolonged delays have resulted in work stoppages, slowed execution in multiple districts, and a sharp decline in annual connection pace, from 2.99 crore households in FY2023-24 to only 0.94 crore in FY2024-25 (a drop of nearly 70 per cent),” the body said.
Not only has this frozen working capital, it has also created unprecedented financial and operational stress on companies and heavy interest burdens, it added.
Highlighting supply chain disruptions, labour attrition and site-level disruptions, the body said vendors insist on cash terms even while indirect costs such as idle manpower, machinery, administrative and compliance expenses add to the woes.
There is also the risk of bank guarantee invocation and tightening of credit facilities, the body said, and suggested immediate clearance of certified dues in a time-bound manner.
“JJM is a national priority of the highest order. Contractors and suppliers remain fully committed to its success. However, without immediate resolution of payment delays, both the mission’s outcomes and the livelihoods linked to it face serious jeopardy,” it stated.
Amongst other solutions, it pitched for the provision of price variation mechanisms to address escalation in input costs during delays and the creation of a transparent public dashboard showing state-wise pending certified amounts to enable effective planning and accountability.
Seeking the immediate intervention of the government to address this matter with the concerned authorities and facilitate early resolution, Assocham noted that as of February 1, 2025, the mission has so far successfully provided tap water connections to 12.20 crore additional rural households, bringing the total coverage to 15.44 crore households, which accounts for 79.74 per cent of all rural households in India.
This is a significant milestone compared to August 15, 2019, when only 3.23 crore (17 per cent) rural households had tap water connections at the time of the mission’s launch by Prime Minister Narendra Modi.
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