Jwala, a bronze medallist along with Ashwini in the 2011 World Championships, had slammed the ministry for ignoring her for the TOP Scheme last month.
However, a Sport Ministry source told PTI that Jwala and Ashwini's name were considered during the meeting of the Identification Committee held on April 21.
"The names of Jwala Gutta and Ashwini Ponappa were considered for inclusion in the TOP Scheme at the meeting of the Identification Committee held under the chairmanship of Anurag Thakur, MP on 21st April, 2015 in New Delhi," the source said.
The TOP scheme identifies medal prospects from a few sports, including badminton, to provide funding for top-class training for the 2016 Olympics.
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Six shuttlers who were named by the Ministry for the scheme are London Olympics bronze-medallist Saina Nehwal, P V Sindhu, P Kashyap, K Srikanth, Guru Saidutt and H S Prannoy.
Soon after the government released the names of the athletes, Jwala lashed out chief national coach Pullela Gopichand for promoting players of his own academy players and accused him of "biased selection" for ignoring her name from the TOPS list.
"The process of inclusion of names under the TOP Scheme is not yet over. Also, the athletes who have not so far been included under the TOPS have also been receiving assistance from the Government of India under its normal scheme of Assistance to National Sports Federations.