India's National Commission for Women wants Madhya Pradesh state to explain why hundreds of would-be brides reportedly underwent virginity tests.
All the women who took part in a state-run mass wedding last month were forced to take the test, witnesses say.
Several of the women later complained that they had found the exercise shameful and humiliating.
Officals deny virginity tests took place. They said the tests had been to ensure the women were not pregnant.
In India, a bride's virginity is highly prized and pre-marital sex is frowned upon.
According to reports, young women who had signed up for the mass marriage ceremony in the city of Shahdol, 600km (373 miles) from the state capital, Bhopal, were told about the test when they reached the venue.
Almost all of them were from poor, tribal families.
Eyewitnesses said the women had to queue up before undergoing an extensive physical examination by a female doctor before they were given a special badge which allowed them to participate in the ceremony.
Several of the women were quoted as saying that they had at first refused to submit to the test - but were told by officials that they would receive their wedding gifts worth 6,500 rupees (about $132) only if they took the test.
"Such a shameful act where girls had to reportedly undergo tests to prove their chastity to avail the government's financial aid were sinful and could not be tolerated in a sane society," the chairperson of the Indian National Commission for Women, Girija Vyas, said.
But a senior administration official in Shahdol, Neeraj Dubey, denied there had been any virginity tests.
He told the BBC that the number of marriage candidates who had turned up at the venue had far exceeded initial applications.
Many of the would-be brides did not have proper documents and some looked "dubious", he said. Therefore, officials present had asked the doctor to examine the candidates, he said.
Officials say pregnancy tests were introduced after a woman gave birth during an earlier mass wedding ceremony.
Read complete article : BBC