The clarification, issued by the PIB today, came days after senior Congress leader Ahmed Patel had claimed that Narendra Modi-led government refused funds for Saurashtra Narmada Avtaran Irrigation Yojana (Sauni) Project of Gujarat.
On May 13, Patel tweeted that BJP government in Gujarat should explain reasons for Centre's decision to deny funds.
"Why has Centre rejected funds for Gujarat's Sauni project? Isn't it an injustice to the state or the people were being sold unfeasible dreams?" Patel asked.
"The Ministry of Water Resources, River Development and Ganga Rejuvenation has conveyed its 'in-principle' approval for Sauni-II project to the Department of Economic Affairs, Government of India in October, 2016," said the statement.
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As a standing procedure, all major and medium irrigation projects are required to undergo technical evaluation by Central Water Commission (CWC) and that states should submit a compliance report on the observations of CWC, said the PIB release.
"In the case of Sauni-II project, CWC had made certain observations on the preliminary project report submitted by Gujarat government," said the release.
Narendra Modi, when he was the Chief Minister of Gujarat, conceived the ambitious project, which is divided in four phases.
Under this project, the state government plans to fill 115 dams of Saurashtra region with excess overflowing water of Sardar Sarovar dam across river Narmada, by a web of pipeline network.
Last month, Modi visited Botad town to dedicate phase I of link-II pipeline canal of Sauni project and lay foundation stone for the phase II of link II of the project for Botad and Bhavnagar districts.