The development comes amidst reports of farmer suicides in hailstorm-hit areas of Maharashtra.
"A relief of Rs 856 crore has been approved for Maharashtra and Rs 495 crore to Madhya Pradesh by the EGoM," the government source said.
The source clarified that the Election Commission's nod is not required for announcing the central relief as Maharasthra and Madhya Pradesh governments have already declared some districts as disaster hit.
The Maharashtra government had sought Rs 1,427 crore relief for the affected farmers.
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Unseasonal rains, wind and hailstorm early this month has affected about 30 lakh hectares of rabi (winter) crops like wheat, pulses, oilseeds and horticultural crops in the two states.
In Maharashtra, crops in 17,69,403 hectares in 28 districts have been damaged, while in Madhya Pradesh 11,55,993 hectares in 51 districts have been hit, he said.
Crops in 13 districts of Karnataka and some parts in Rajasthan and Andhra Pradesh have also been affected by untimely rains. The Karnataka government has also sought a relief package.
As of now, Rajasthan and Andhra Pradesh governments have not send any memorandum seeking assistance from the centre to affected farmers, the sources added.