what is the meaning of the term pending with
Pending comes from the same root as words like pendulum - it means, literally, hanging. In normal use, it means that an outcome is expected, but it is waiting for action from someone. In British technical English, you may see terms like "patent pending" (a patent has been applied for, but not yet granted). In everyday use, it is found in business jargon "we may offer you a loan, pending the usual checks on your income". The example you give is not quite standard British English (and why should it be?) - but the clear implication is that the questioner believes that there has been undue delay in the Centre's response to the proposal. He thinks it has been "left hanging" and is probably trying to embarrass the Centre into action.
In this context it is intended to mean that the response by "the Centre" to "the government's proposal" was in some way delayed, i.e. the Centre had received the proposal but had not yet prepared their response, and that the government was waiting for it.
The intention of the MP's question was likely to determine whether the delay was deliberate or accidental, with the possible implication that the answer would show the Centre in a negative aspect—either incompetent or obstructive—and so the MP could speed up the process by highlighting this.