Just checked with my sources in the government - and what I hear is that the allocated funds *isn't* for Sanskrit Wikipedia, but a project "on the lines" of Sanskrit Wikipedia, but perhaps with editing control.

On Fri, Feb 25, 2011 at 10:45 AM, Prashanth NS <prashanth.ns@gmail.com> wrote:
Yea. I remember that announcement 2 years back and then it got converted into an internal project. 

But, a good opportunity for advocacy here. Perhaps some chapter members should meet the department officials and try and get co-opted into the decision-making process. Often, it is lack of information and trust that scares them. Unlike 2 years, back with the chapter in place and most of us quite well networked, we should get involved closely and see if we can get them to invest in improving the sanskrit and kananda wikis.

The government usually prefers a project with editing control rather than one without any direct control over content decisions made. 

Hari Prasad Nadig