They alleged that the president of the lake development association was involved along with the district water shed officials.
Nearly Rs 4.30 lakh out of the money earmarked for lake development had been returned without being utilised. Loans had not been distributed properly to eligible poor beneficiaries, they alleged.
The protesters urged criminal proceedings against the president of the association who had got the money released periodically and also demanded action against the officials for their involvement.
The protest was led by Pandit Munivenkatappa. The Watershed Development office was locked from morning 10 till 2 pm.