The announcement came when Union home minister Sushilkumar Shinde visited Arthur Road jail and reviewed its security on Saturday.
Shinde said that the Centre had decided not to recover the cost from the state under the condition that the money would be used for prison reforms across Maharashtra.
The waiver comes after Maharashtra home minister RR Patil had written to the Centre stating that the state alone should not be asked to bear the financial burden for Kasab’s security.
“This amount of Rs21 crore along with another unutilised amount of Rs6 crore will be used for upgradation of ja.ils and prison reforms,” said a senior government official.
The state government has also asked for extending video conferencing facilities made available to prisoners for seeking extension of dates of their cases for full trials, which will help reduce pressure on the Arthur Road jail.
“The Arthur Road jail has prisoners thrice its original capacity owing to its proximity to the court. If we have full trials through video-conferencing, we will be able to move many prisoners to other jails,” the official added.
Shinde on Saturday said he would be visiting all major jails across the country to review the security. His next stop is Tihar in New Delhi.