Foreign aid: Maharashtra allowed, Kerala denied. Why and who is lying?

While Kerala fumed over the Centre's approval for Maharashtra to accept foreign aid this year, the Union Finance Ministry said on Monday that Kerala never filed an application for registration under the Foreign Contribution (Regulation) Act, 2010. Minister of State for Finance Pankaj Chaudhary, in a written response to a query by Adoor Prakash MP, stated that as per FCRA portal, no application for registration or prior permission under FCRA, 2010, had been received from Chief Minister's Distress Relief Fund (CMDRF), Kerala.

The minister added that the Chief Minister's Relief Fund, Maharashtra, which is a distinct legal entity incorporated as a public charitable trust, independently submitted an application under the FCRA and upon examination of its application and satisfaction of all statutory conditions, FCRA registration was granted in May 2025.

It was the first time in the country that a state government-run distress relief fund was given permission to receive foreign funds. Kerala made its displeasure very clear after Maharashtra received the nod to receive foreign funds in CMDRF. In 2018, following the massive flood that devastated Kerala, the Centre declined to give consent to accept foreign aid for relief works. The refusal of the BJP-led Union government kicked up a row in Kerala.

As per Section 11 of the FCRA, no person shall accept foreign contribution unless such person has obtained a certificate of registration or prior permission from the Central Government. Applications for registration or prior permission are to be submitted online in specific forms through the ministry's portal and must be accompanied by requisite documents such as the memorandum of association, activity reports, audited financial statements, and affidavits/declarations by office bearers, as prescribed under the rules. Pankaj Chaudhary said that the grant of registration is subject to fulfilment of eligibility conditions under relevant sections, including lawful existence, engagement in genuine activities for the benefit of society, etc.

Kerala Chief Minister Pinarayi Vijayan on June 27, 2019, stated in the Legislative Assembly that several foreign countries, including the UAE, had expressed a wish to make contributions for post-flood relief works in Kerala; however, the consent was denied by the Centre. The reply further shows that while permission was sought to send delegations comprising various ministers and higher officials to mobilise funds for relief works, consent was given only for the Chief Minister and the Principal Secretary.

Former Kerala Finance Minister T M Thomas Isaac denied the statement of the Centre that Kerala did not seek permission. "We had created a file by which an application was sent to the Centre on accepting foreign aid. It was rejected. An application for FCRA registration was also filed, but there was no response," Isaac told Onmanorama.

Kerala's Finance Minister K N Balagopal criticised the Centre in May 2025 after permission was granted to Maharashtra to accept foreign aid. The minister said that while Kerala was not against giving nod for Maharashtra, the Centre ought to have treated all states fairly, and the decision regarding Maharashtra was driven by political bias.

The office of Minister Balagopal said that while the Centre denied Kerala permission to accept foreign aid for rebuilding activities post the 2018 flood, no reason was mentioned and that there was no reference to FCRA registration.