Conservationists allege that they caved in to mining interests.
Last year, the government approved two new reserves in the mineral-rich areas of Orissa state aimed at strengthening the conservation of elephants and other wildlife such as tigers, leopards, deer and hundreds of species of rare reptiles.
But conservationists claim the plans have been dropped to ease the way for big steel investors like Vedanta Resources Plc, JSW Steel and Arcelor Mittal to mine for iron ore, manganese and bauxite.
"Multi-nationals can now carry out mining easily and get all the environmental clearance without any impact study on wildlife at all," said Biswajit Mohanty of the Wildlife Society of Orissa.
Government officials denied the charge.
"The area for the two proposed elephant reserves was too big and that was why we withdrew the proposals," said P.N. Padhi, a senior official in Orissa's forest and environment department.