Bhubaneswar, Jan. 19: The state government will start excavation at Aragarh, a place situated 24km away from here that is known for its Buddhist-era settlements, later this month.

"The hills in Aragarh have caves of Buddhist ascetics. These may shed new light on the continuity and growth of Buddhism in east India," said tourism and culture minister Ashok Panda.

The government will spend Rs 20 lakh on the excavation, which is likely to continue for a few months.

On the top of the hill, there is a cave temple. There are several monolithic stupas around the temple, while the huge size of the mound suggests the existence of a large Buddhist complex, which is possibly still buried.

Located at Delanga in Puri district, the site was explored several times by the Archaeological Survey of India in 1992 and the Odisha Institute of Maritime and South East Asian Studies in 2010-11.

"Discovery of broken Buddhist icons made of igneous rock and carving of Naga Kanyas and Gaja Sinhas in the four pillars of the temple stand ample testimony of Buddhist settlements," said secretary of Odisha Institute of Maritime and South East Asian Studies Sunil Patnaik, who is also a scholar on Buddhist studies.

Earlier, Buddhist statues and sculptures were found during excavation in the hills. A few years ago, some spectacular sculptures were found there, which are now kept in the Bhagabat Tungi of Haripur village. Numerous fragments of railings were also noticed. "The excavations will help fill the gap in the state's history," said Patnaik.

Plans are also on to explore and develop the site as a tourist destination. Places, such as the Barunei hills, Atri hot spring and Khurda fort are close to the Buddhist site.