Kerala accuses Centre of selective federalism on foreign aid

The Kerala government has sharply criticised the central administration for granting Maharashtra permission to receive foreign donations for its Chief Minister’s Relief Fund, a privilege Kerala claims was denied during its 2018 flood crisis.
Finance Minister, K.N. Balagopal, expressed strong disapproval, highlighting the disparity in the Centre's decisions. He pointed out that while Maharashtra's CMRF has been granted a licence under the Foreign Contribution Act, Kerala's request for similar permission during the devastating 2018 floods was rejected, despite substantial offers of international aid. Balagopal accused the Centre of prioritising political considerations over humanitarian needs, stating, "It's not disasters and sufferings of people but politics that is the criterion for the Centre to take such decisions, which is unbecoming of administrators."
The Union Home Ministry's recent approval allows Maharashtra's CMRF to accept foreign contributions, marking the first instance of a state relief fund receiving such clearance under the FCRA. This move enables Maharashtra to tap into corporate social responsibility funds from multinational companies operating within the state. An official from the Maharashtra Chief Minister's Office noted, "There are many multinational firms here with significant CSR allocations. These resources can now be used to help more people in need."
In contrast, during the 2018 floods, Kerala faced significant challenges in securing foreign aid. The United Arab Emirates had reportedly offered ₹700 crore for Kerala's reconstruction efforts, but the Centre did not permit the state to receive the assistance. The Ministry of External Affairs maintained that India had a policy of not accepting foreign aid for disaster relief, asserting that sufficient domestic resources were available to handle such situations.
Balagopal's criticism extends beyond the 2018 incident. He has previously accused the central government of financial discrimination, alleging that Kerala has been subjected to fiscal constraints, including reduced tax shares and limited borrowing capacities. In November 2024, following the Wayanad landslide disaster, which claimed nearly 400 lives, Balagopal condemned the Centre for refusing to declare it a national disaster and for denying adequate relief funds. He described the Centre's actions as "gross discrimination without justification," emphasising the need for equitable treatment of states in times of crisis. Open URL