The Ministry of Justice is asking the state to return ₹36.34 cr. released under PMKSY with 7% interest

HYDERABAD

The Directorate of Monitoring and Evaluation under the Ministry of Jal Shakto (MoJS) has requested the Government of Telangana (Irrigation Department) to refund ₹54.22 crore central assistance including interest released under the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) for nine ongoing projects.

In a letter to the Chief Engineer of Telangana, the M&A Director noted that the Telangana government had written to her in July 2023 that it had dropped the proposals submitted for 11 projects in the past and modified the release of central assistance to nine other eligible projects, including Devadula Lift Irrigation Scheme, Rjiv Bhima@LIS, SriramsagathII and Padgandavagar.

However, the Ministry of Justice clearly stated in a letter dated December 14, 2023 that “the released funds should be used only for the purpose for which they were sanctioned and unused funds should be returned with interest.” The M&A director further pointed out that as per paragraph 7 of the MoU, in case the state government fails to complete the projects as per the said time schedule, the released funds will be converted to loan to the state government.

Subsequently, the Director General of Audit, Chennai raised an audit reminder for recovery of central assistance of ₹ 36.34 crore along with interest of ₹ 17.88 crore till January 2026 at the rate of 7% per annum. The Directorate had requested the Ministry of Justice in May this year to expedite the project amount to be recovered from Telangana.

In response, the MoH had suggested the directorate earlier this month to recover the central assistance along with interest. In the audit findings attached to the letter to the ENC, the directorate said the Center had approved 11 Telangana projects in March 2017 with assistance of ₹ 722.61 crore against a total project cost of ₹ 1,525.64 crore for a period of three years.

The Center released ₹10.22 crore in 2017-18 and ₹26.12 crore in 2018-19 (total ₹36.34 crore). In July 2023, the state government wrote to the Central Water Commission that no physical progress could be made on any of the 11 projects due to farmers’ reluctance to provide land for construction of field canals, and requested to cancel the projects and reallocate the released assistance to 9 other projects and release the balance assistance of ₹146.77 million.

The audit found that the released assistance of ₹36.34 crore was not utilized for even nine projects and remains with the state government.

Published – 22 Jul 2026 22:38 IST