Telangana continues to face substantial pending payments to employees, retirees and contractors despite government claims of phased clearance. Employee groups cite over Rs 14,200 crore in dues, while contractor liabilities have also risen, keeping arrears and payments at the centre of protests.
Published Date – 2 October 2026, 03:31 PM
Hyderabad: Nearly three years into its tenure, the Congress government is still grappling with mounting arrears, with employees, retirees and contractors repeatedly protesting inside the State Secretariat, government offices and several other places over delayed payments.
When Deputy Chief Minister and Finance Minister Mallu Bhatti Vikramarka presented the State finances white paper in December 2023, he put the inherited backlog at Rs 40,154 crore, including Rs 6,244 crore in employee dues. The government claimed to have cleared around Rs 4,575 crore in employee dues since taking office.
However, the employees’ Joint Action Committee (JAC) had pegged the outstanding payments to serving employees and retirees at over Rs 14,200 crore as of August 2026. The dues include Rs 6,200 crore for serving employees and Rs 8,000 crore for retirees, including General Provident Fund (GPF) and other retirement benefits.
Retirees alleged that only those who paid upto 10 per cent of their dues as commission to middlemen were able to get their dues settled.
Nearly 9,000 employees retired this year alone, while salaries exceeding Rs 2,000 crore for contract, outsourcing and temporary staff remain pending, with delays extending to six months in some cases.
In last three years, the salary and wage component of the State budget shot up by around 1.66 per cent frp, 17.81 per cent in 2023-24 to 19.47 per cent in 2026-27. During the period, salary and wage allocations rose from Rs 38,627.52 crore in 2023-24 to Rs 48,358.21 crore in 2026-27 and pension allocations increased from Rs 13,024.07 crore to Rs 14,736.56 crore.
Six instalments of Dearness Allowance arrears had been pending since July 2023. The Cabinet has approved two instalments on Thursday, leaving four pending. Implementation of revised pay scales, promised during the Assembly elections, also remains pending.
Despite claims of monthly releases of Rs 700 crore to Rs 1,000 crore and Rs 6,000 crore paid towards arrears over three months, employees and contractors continued to protest outside Bhatti Vikramarka’s chambers at the Secretariat. Employees cited delayed medical reimbursements and retirement benefits.
Meanwhile, contractors, especially those who executed small and medium works, also have been staging protests and are now awaiting payments for completed works. The State government owes more than 51,000 crore to contractors, former sarpanches and other payments, which shot up from around Rs 34,000 crore in December 2023. Despite clearing around Rs 8,000 crore from the inherited backlog, officials admitted that the continuing accumulation of fresh bills alongside unpaid arrears led to the rise.
The Telangana High Court has sought details of pending retirement benefits in cases filed by retirees and intervened in contractor-payment disputes. Despite court directions and assurances, substantial dues remain unresolved, raising questions about the effectiveness of its phased-clearance strategy.
