The decision was taken at a meeting presided over by Union Health Minister JP Nadda in the presence of Union Minister Dharmendra Pradhan.
The State Government had taken the permission to construct the medical colleges in Baripada and Koraput under Central Sponsored Schemes. Though a team from the medical council had visited the college to take stock of the infrastructure and other facilities, it had not given the Letter of Permission.
Though the State Government had also sent a reminder last month, no action was taken.
On Thursday, the Bar Association in Mayurbhanj had called for a 12-hour bandh on this issue.