A novel high-shear wet granulation process was invented for modified release formulation of active ingredients, which involves addition of a granulating fluid into the powder dry mixture of API with or without additives other than release retarding polymer to prepare a semisolid mass. Addition of release retarding polymer to the semisolid mass obtained above and further kneading to yield uniform granules. These granules which upon compression into tablets gives desired dissolution profile with significantly less quantity of release retarding polymer than that of tablets containing same release retarding polymer, prepared by conventional high shear wet granulation process.