[Answered] The Centre’s differential FCRA treatment for state relief funds raises concerns about federalism and transparency. Analyze its implications for Centre-State relations and the equitable application of foreign aid policy for disaster management.

Introduction

The Centre’s recent approval of FCRA registration for Maharashtra’s CM Relief Fund, while denying Kerala similar aid during past disasters, raises questions about federal equity, transparency, and disaster management fairness.

Implications for Centre-State Relations

1. Erosion of Cooperative Federalism: The unequal FCRA treatment violates the spirit of Article 1 (Union of States) and cooperative federalism, where disaster responses should transcend political lines and prioritize humanitarian needs.
2. Perceived Political Bias: Kerala’s government alleged “political discrimination” compared to Maharashtra. This fosters distrust and polarisation, undermining confidence in the Centre’s neutrality during emergencies.
3. Centre’s Over-centralization: The FCRA 2010, controlled by the Union Ministry of Home Affairs, centralizes the discretion over foreign aid. This weakens the autonomy of states in soliciting international support during crises.
4. Precedent of Rejection — Kerala 2018: The Centre rejected UAE’s ₹700 crore flood aid offer in 2018, asserting India’s self-sufficiency. Yet, it permitted PM-CARES to receive foreign donations without FCRA registration. This inconsistent application contradicts earlier positions.

Concerns Over Transparency and Equity

1. Opaque FCRA Approvals: The FCRA approval process lacks clear, objective criteria, leading to perceptions of arbitrariness. Absence of parliamentary oversight or judicial review makes states vulnerable to selective approvals.
2. Differential Treatment of Relief Funds: Maharashtra’s CM Relief Fund is the first state relief fund to receive FCRA registration. Kerala, despite major disasters like the 2024 Wayanad landslides, continues to be denied similar access, questioning equitable application.
3. Contradictory Standards for Foreign Donations: While NGOs and institutions like Ramakrishna Mission received FCRA nods in 2024, state-led disaster relief funds are treated inconsistently. This duality lacks policy coherence and erodes public trust.

Impact on Disaster Management and Governance

1. Weakened Disaster Resilience: States like Kerala with high disaster vulnerability need financial agility during crises. Blocking foreign aid hampers quick response, affecting recovery and rehabilitation of victims.
2. Disincentivizing Local Initiative: State governments may hesitate to launch ambitious disaster responses if central support is uncertain or politically influenced. This could discourage decentralized disaster governance, against the mandate of the Disaster Management Act, 2005.
3. Uncertainty in Global Aid Engagement: International donors are left unsure about India’s openness to aid, especially when foreign policy contradicts humanitarian need. This affects long-term goodwill and global partnerships in disaster support.

Way Forward

1. Codified and Transparent FCRA Criteria: Establish a clear and fair FCRA framework for state governments to access foreign aid during disasters, based on need assessment rather than political alignment.
2. Independent Disaster Relief Body: Create a National Disaster Aid Clearance Authority with state representation to assess and clear foreign aid proposals, enhancing neutrality and federal confidence.
3. Equal Treatment in Finance Commission Awards: Kerala’s plea to restore its devolution share from 1.92% to previous levels (3.88%) underlines the need to address structural imbalances through the 16th Finance Commission.

Conclusion

Disaster relief must be guided by humanitarian urgency, not politics. Ensuring equitable FCRA treatment and transparent aid policies is vital for cooperative federalism, disaster resilience, and inclusive Centre-State relations.