On a review tour to the desert State, he told a press conference here the assessment report by the States would be made quarterly and each State would be required to submit the latest position of funds sanctioned and the amount utilised under various schemes and the progress made.

Naidu said he had reviewed the rural development schemes of 18 states in just three and half months of his tenure and found that most of states "had not even utilised" the funds allocated in the first installment.

On Panchayti Raj system adopted by many states, the minister said he would hold an all party meeting to be headed by the Prime Minister on the matters of devolution of power

Stating that most of the states have flouted norms on the devolution of powers and money to the panchayat bodies, he said henceforth a status report would be prepared and placed before the all-party meeting. The national institute of rural development stationed at Hyderabad has been entrusted with the job of preparing a status report on the devolution of power and money of each State and as soon as it was prepared the all-party meeting would be called, Naidu said.

The minister warned that if any State failed to utilise allocated funds as per schedule and comes up with an opening balance in April, the Centre would not sanction any more grant in the next financial year.

Citing an example, Naidu said out of the total rural development grant of Rs 496.65 crore as on April one, 2000 Rajasthan has spent just Rs 270.24 crore and the remaining amount was still in the State exchequer.

Despite this delay, the Centre has released the second installment to the State and relaxed the rules in view of the famine recurring for the third consecutive year.

He said he was reviewing the State's performance on rural development and that a comprehensive report on this would be made available to all by April. The ministry would soon float a four-point strategy to get the rural development schemes implemented in the states, he added.