Karnataka's '40% Commission' Allegations

“Local registered contractors in Karnataka have to pay 25-30% [of contract value] to elected representatives and others; after completion of works, there is harassment to pay 5-6% towards release of payment.”

— Karnataka State Contractors' Association, led by its then vice-president D. Kempanna and office-bearer Ambikapathy, Trade body representing government works contractors, in a July 2021 letter to the Prime Minister's Office · 6 July 2021

This is the contractors' association's own allegation, not a government commitment — it is the founding claim of the entire controversy, later summarised in public debate as a demand for '40% commission,' and the Bommai and Siddaramaiah governments have each denied it applies to them.

Public works contracts awarded and paid out strictly on merit and completed work, without any percentage-based kickback demanded by officials, legislators or ministers at any stage of a contract's life cycle.

Standard public procurement integrity norms applicable to state Public Works Department (PWD) contracts.

In force from 6 July 2021

The Karnataka State Contractors' Association's 2021 letter to the PMO triggered a sustained political controversy: in 2022, a Koppal contractor, Santosh Patil, alleged extortion by a minister's aide before dying, which the opposition called a suicide linked to commission demands; the Congress party ran a high-profile 'PayCM' poster campaign against the Bommai government ahead of the 2023 election, which Congress won. The BJP has repeatedly said the Lokayukta cleared the Bommai government of the allegation. After coming to power, the Congress government appointed retired Karnataka High Court judge Justice H.N. Nagamohan Das to head a commission of inquiry covering works executed between July 2019 and March 2023 (the BJP's tenure). The commission submitted a roughly 20,000-page report in March 2025 which, according to reporting on it, found no clear evidence of a systemic '40%' commission structure but did name two former BJP MLAs and a senior PWD engineer over individual allegations. The state government subsequently formed a Special Investigation Team and a separate committee under retired IAS officer Sudhir Krishna to study the report further. The BJP has dismissed the report as 'political.' Separately, the Contractors' Association itself later said the same commission-demanding culture continues under the Congress government, extending the allegation to both major parties rather than resolving it.

As of 12 March 2025

1. 6 Jul 2021Announcement
   Contractors' Association writes to the PMO

   The Karnataka State Contractors' Association alleges that officials and elected representatives demand 25-30% commission on contract value, plus 5-6% to release final payments.

2. 12 Apr 2022Status
   Koppal contractor dies amid extortion allegation

   Contractor Santosh Patil dies in Udupi; opposition parties allege it followed extortion demands by an aide of a state minister, intensifying the commission controversy.

3. 1 Sept 2022Status
   Congress launches 'PayCM' campaign

   The Congress party runs a poster and social-media campaign against Chief Minister Basavaraj Bommai using the '40% commission' allegation ahead of the 2023 state election.

4. 1 May 2023Status
   Congress wins Karnataka election

   The Congress party, which had made the '40% commission' allegation a central campaign theme, wins the Karnataka assembly election and forms the government under Siddaramaiah.

5. 1 Aug 2023Announcement
   Government orders judicial inquiry

   The new Congress government orders a judicial probe into the '40% commission' allegations against the preceding BJP government, to be headed by retired Justice H.N. Nagamohan Das.

6. 12 Mar 2025Milestone
   Nagamohan Das commission submits report

   The commission submits a roughly 20,000-page report on the contractors' association's allegations and a separate report on the Narayanapura Canal modernisation works to the state government.

7. 14 Mar 2025Status
   Report reportedly finds no systemic evidence, but names individuals

   News coverage of the report says it found no clear evidence of a systemic 40% commission structure, while naming two former BJP MLAs and a senior PWD engineer over specific allegations.

8. 1 Mar 2025Status
   State forms SIT and review committee

   The Karnataka cabinet decides to form a Special Investigation Team and appoints retired IAS officer Sudhir Krishna to head a committee studying the commission's report further.

No criminal chargesheet, arrest or court conviction stemming directly from the '40% commission' allegations has been confirmed as of publication. The matter has proceeded via an executive commission of inquiry rather than a criminal investigation; that commission's report has been submitted but its findings remain under review by a state SIT and a separate government-appointed committee, and no final government or judicial determination has been reached.

• The full text of the Justice Nagamohan Das commission's report has not been reviewed; this entry relies on news summaries of its conclusions.
• The outcome of the Special Investigation Team's further inquiry, and of the Sudhir Krishna committee's review of the commission report, has not been confirmed as of publication.
• It is unclear whether the two former BJP MLAs and the PWD engineer named in the report have faced any formal charges, disciplinary action, or further investigation as a result.
• The current status (as of 2026) of the Contractors' Association's allegation that the same commission culture continues under the Congress government has not been independently verified beyond initial reporting.