Exposé: Why Kerala’s Theatrics Over Foreign Aid Are Just A Political Smokescreen

On May 30, 2025, the Union Ministry of Home Affairs granted FCRA registration to the Mahayuti-led Maharashtra’s CMRF, enabling it to accept foreign donations for social programs, including disaster relief, medical aid, and educational support.

Despite the statutory nature of the process, Kerala’s Finance Minister, Shri. K.N. Balagopal created a controversy by claiming that the Centre’s approval for Maharashtra’s Chief Minister’s Relief Fund (CMRF) to receive foreign donations reeks of political bias and favouritism. He pointed to the 2018 Kerala floods, alleging that Kerala was unfairly denied similar permissions and further alleged it was politics and not distress or disasters that determined the decisions of the Centre.

Was there bias?

At first glance, this might seem like another chapter in the ongoing tension between the state Government and the Centre. Or are we looking at a wider picture of political theatre disguised as fiscal injustice? A close examination of the claims reveals the futility of the allegations made by K.N. Balagopal and also the hoax surrounding the story of foreign aid to Kerala during the 2018 floods.

First of all, the process of granting an FCRA registration is statutory in nature. The process of granting clearance is regulated under Sections 11 and 12 of the Foreign Contribution (Regulation) Act (FCRA), 2010.

Notably, this marks the first time a state government relief fund has received such approval, potentially opening doors to corporate social responsibility funds from multinational companies operating in Maharashtra. Registration is granted within 90 days, provided that the applicant meets key conditions under Section 12(4) of FCRA, namely, that the organisation is genuine, does not promote religious conversions, and ensures proper use of funds. Maharashtra’s CMRF, registered as a trust under the Bombay Public Trusts Act, 1950, fulfilled all these criteria.

Rejection Of Foreign Aid As National Policy

Here is a fun fact: while Minister Balagopal claims that Kerala was not able to receive foreign aid because the Centre denied clearance, at the same time, Kerala has many charitable institutions that have historically been significant recipients of foreign contributions.

In 2011–12, 1,648 organisations in Kerala received ₹1,027 crore in foreign donations, with Pathanamthitta district ranking fifth nationally among districts receiving such funds, alongside major cities like Chennai and Mumbai. Believers Church in Pathanamthitta consistently ranked among the top recipients, highlighting Kerala’s robust access to foreign aid.

This undermines the narrative that there is a restriction on Kerala receiving funds from foreign countries, as organisations in the state already benefit from substantial foreign contributions through FCRA-registered organisations.

In the past, organisations that did not comply with the FCRA guidelines were not given registration, losing their ability to receive foreign aid. Prominent names among these include the Missionaries of Charity and Zakir Naik’s Islamic Research Foundation. In the past, many investigations have revealed that while receiving an FCRA clearance is mandatory to legally receive foreign contributions, many organisations were allegedly receiving funds without any such clearances.

Under FCRA, any non-political organisation set up by a law or order of the Central or State Government, fully Government-owned, and audited by the CAG or its agencies, is exempt from FCRA provisions. According to the Government of Kerala, the CMDRF is managed by the Revenue Department and audited by the CAG, making it legally eligible to receive foreign contributions without FCRA registration. This completely exposes Balagopal’s ridiculous claim that political bias was the basis of granting clearance.

Now onto the second claim — that Kerala was not allowed to receive foreign aid during the 2018 Kerala floods. Chief Minister Pinarayi Vijayan claimed the UAE offered ₹700 crore to the CMDRF through a Facebook post. He cited that this information had been conveyed to him through the chairman of Lulu Group, M.A. Yousaf Ali, but UAE officials clarified that no specific amount was finalised. There was no offer to begin with, and this was a whole instance of speculation turned into a headline.

What is even more important to note is that India’s policy since 2004 (from the time of the Manmohan Singh Government) has been to reject foreign disaster aid to show self-reliance. This policy has been applied consistently in cases like the 2004 tsunami and the 2013 Uttarakhand floods.

The Government’s rejection of the alleged offer was not based on political considerations or ill-will towards Kerala, as Minister Balagopal claims, but rather it was based on a policy consideration.

This is substantiated by the Ministry of External Affairs’ statement during the 2018 floods: “The Government of India deeply appreciates offers from several countries, but in line with existing policy, is committed to meeting requirements through domestic efforts.” This underscores the above-mentioned claim that it was not political gimmicks but rather well-thought-out policy considerations that were at play.

Kerala: The Master in Financial Mismanagement

While Kerala accuses the Centre of bias, its own financial decisions paint a direct picture.

In 2023, the Kerala Government allocated ₹10 crore for earthquake relief in Turkey. While this funding is being shown as a goodwill gesture to the earthquake victims of Turkey and Syria, this was at a time when the Kerala Government was facing an acute financial crisis. This move, defended as a humanitarian gesture, was criticised by Congress MP Shashi Tharoor as “misplaced generosity.”

Interestingly, according to the Ministry of External Affairs, there are only 1,708 Overseas Indians in Turkey, of which 1,608 are NRIs and just 99 are Persons of Indian Origin. This aid was above and beyond the support the Government of India had extended to Turkey through its official mission, which provided rescue personnel, specialised equipment, vehicles, and relief materials.

Additionally, Kerala spent ₹27 crore on the ‘Keraleeyam’ event in November 2023, a week-long celebration of Kerala’s formation day, branded as the state’s biggest cultural extravaganza. This occurred while welfare pensions for 55 lakh people were delayed and electricity tariffs were hiked. Then-Governor Arif Mohammed Khan criticised this spending during a financial crunch, noting the contradiction in Kerala’s claim of increased tax revenues while alleging a crisis. These decisions clearly suggest that Kerala’s financial strain is self-inflicted and not due to Central policies.

Foreign Aid As Political Theatre

Minister Balagopal’s claim is part of a long-standing strategy adopted by the Kerala Government to subvert their own financial mismanagement by playing the victim card and claiming that they are being choked by the Centre. But this is nothing short of the truth.

Kerala has been at loggerheads with the Central Government over finance issues and has been citing issues like reduced borrowing limits, inadequate disaster relief, and the Centre’s financial policies for the financial struggles in Kerala. This controversy over FCRA is nothing but on similar lines to placate and create a false narrative of partiality so that they can avoid accountability.

The Kerala Government has consistently tried to portray itself as a protector of minority communities in opposition to the Central Government. This narrative is yet another attempt to show the State Government is at the forefront of “fighting” the tyranny of the Modi Government. In doing so, it aims to shape a favourable public narrative, even if that means making unsubstantiated claims, as evident in this controversy.

The state is trying to portray itself as a victim of the Central Government’s vendetta by claiming that other states are allowed to receive foreign funds while it was not allowed during its time of crisis. Stories like these are perfect recipes for polarising the public discourse in favour of the Government while the truth and facts of the matter stand aloof from what CPM and its finance minister have been portraying.

The facts of the matter are that Kerala’s CMDRF was always allowed to receive foreign contributions, as is evidenced from the Kerala Government’s own website. Since the Kerala CMDRF is fully owned by the state Government and audited by the CAG, unlike Maharashtra’s CM relief fund, registered as a social organisation, no separate clearance was required.

Balagopal’s claim of bias in Kerala not receiving approval for foreign funds is absolutely baseless. Kerala, like any other state, is not given permission to receive foreign contributions from sovereign nations during natural disasters, and this is a national policy. Providing FCRA clearance doesn’t mean Maharashtra is allowed to receive foreign funds from sovereign states; it still cannot, because it is a policy decision.

This shows that Minister Balagopal’s claim is totally wrong on both ends: the claim that the Kerala Government doesn’t have FCRA clearance and that Maharashtra has been given some privilege which Kerala was denied. It is high time that the minister stops the blame game and focuses on the real issues plaguing the state of Kerala.