According the sources, the government is confused over whether Anand is an Indian or Spanish citizen.
Following the controversy, Anand was denied an honorary doctorate he was supposed to have received on Monday, Aug 23.
According to CNN-IBN, the Hyderabad university decided to award Anand honorary doctorates in 2009 and forwarded the proposal formally to the Human Resource Development Ministry.
As per the HRD ministry report, Anand, who lives with his wife in Spain, is a Spanish citizen.
However, Anand's wife Aruna said to the channel, "I do not understand from where the confusion on Anand"s citizenship comes from. Anand is and has always been a citizen of India."
University sources said all relevant documents were forwarded to the ministry, which was expected to approve them and send them to President Pratibha Patil, who holds the official title of Visitor at the University of Hyderabad.