3 min readMumbaiUpdated: Jan 27, 2026 10:26 PM IST
Facing acute fund constraints and mounting delays in payments to contractors, the Maharashtra cabinet on Tuesday approved the use of the 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 from the PWD, Water Supply, Sanitation Department and Rural Development Department over non-payment of bills for nearly two years. Contractor bodies have repeatedly warned of halting ongoing works and have also demanded waiver of GST to enable them to recover pending dues. The Maharashtra State Contractors Association, the umbrella body of contractors across the state, has estimated total outstanding payments at around ₹70,000 crore.
Under the TReDS mechanism, contractors will be able to raise their invoices on the electronic platform, after which participating financial institutions will make payments to them. The state government will repay the financier within a period of one year. While the system ensures partial and timely liquidity for contractors, it also allows the cash-strapped state government to defer immediate outflow from 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 financing and discounting of trade receivables of Micro, Small and Medium Enterprises (MSMEs) through multiple financiers. These receivables may be due from corporates, government departments or public sector undertakings. With the Cabinet’s approval, contractors engaged by the Maharashtra government’s PWD will now be brought under the TReDS framework.
“This system will bring transparency to the PWD billing process, helping contractors expand operations and upgrade technology. Following successful implementation, the platform will be integrated with e-tendering and e-procurement portals for seamless invoice submission and discounting,” said an official from the PWD.
Welcoming the move, Maharashtra State Contractors Association president Milind Bhosle said the demand for adopting TReDS had been pending for over a year. “We had raised this demand in February 2025 and even submitted a proposal for the same. After that several meetings at the government level were held and finally the state cabinet has given approval for this. We hope that small contractors will be able to get some money out of it,” he said.
