As part of this exercise, ministers of finance and rural developement on Monday met the Deputy Chairman of the Planning Commission KC Pant.Finance minister Yashwant Sinha told PTI soon after the meeting that "guidelines will be finalised soon for allocation of funds."

Following complaints from some southern states that their interests were not properly taken care of, the Union Government is reported to have stopped the release of funds, collected from 50 per cent of the over Rs 5,600 crore cess on fuel.

Rural development minister Sunderlal Patwa admitted that there were some problems and said that "we will sort out all the concerned issues.

"This is a new scheme... Therefore problems are likely to surface... We will endeavour to run the scheme smoothly," he said.

The government had announced a cess of Rs 1 per litre on diesel last year and extended the same to petrol from the current financial year with the objective of developing national highways and rural roads.

Earlier this year the government decided to earmark half the fund for the rural roads and the resources were to be channelised from the ministry of rural development.

After the near 90 minute meeting, Sinha said "this is a new scheme. We have to examine various aspects... Guidelines will be notified soon."

Patwa said that Centre would adopt a generous approach to meet the financial needs of the states for creating necessary rural infrastructure.

Top officials of Commission and the ministries of finance and rural development were also present during the discussion.