More than Rs 6,000 crore worth of electoral bonds have been sold in 12 cycles since January 2018, 55% of these in 2019-’20, but which parties received how much will only become clear by October 2020 when political parties’ audit reports are due.

The Electoral Bonds scheme was notified by the Central Government on January 2, 2018, post the initial announcement during 2017-’18 budget. One of the main reasons cited for the introduction of the electoral bond scheme was to have control on the unaccounted money flowing into the political system and to improve financial transparency.

Over the nearly two-year period since the introduction of these bonds, there were multiple debates and ongoing discussions regarding the effectiveness of electoral bonds in bringing in transparency and the scope of them being misused to introduce non-traceable money into the political system.

Data journalism website Factly filed multiple RTI queries with regard to this. The following is based on a comprehensive analysis of the information received from the State Bank of India.

Most bonds sold in April

Between March 2018 and October 2019, 12 windows were opened for the purchase of electoral bonds across various SBI branches in different cities. The eighth and ninth phases took place during March and April 2019, and had the longest windows of 15 and 20 days, respectively.

The highest value of electoral bonds sold was Rs 2,256.4 crore, during the ninth phase – from April 1 to April 20. The second-highest value of electoral bonds sold was Rs 1,365.7 crore, during the eighth phase – from March 1 to March 15. Significantly, in the 10th phase – which lasted for a shorter duration of only five days, from May 6 to May 10 – the third-highest amount was sold at Rs 822.25 crore.

So far, 12 windows were opened for the purchase of electoral bonds across various SBI branches. Chart by IndiaSpend.

It must be noted that all three purchases took place during the 2019 Lok Sabha general elections. A total of Rs 4,444.32 crore worth of electoral bonds were purchased during the three phases. In other words, close to 73% of the electoral bonds were sold in just these three phases.

The three most expensive bond purchases took place during the 2019 Lok Sabha elections. Chart by IndiaSpend.

What numbers show

In 2019-’20, a total of Rs 3,355.93 crore worth of electoral bonds have been sold. This is higher than in the previous financial year, when Rs 2,550.78 crore’s worth were sold. The financial year 2017-’18, which had only one phase – in March 2018 – recorded purchases worth Rs 220 crore.

91.7% purchased in Rs1-crore denominations

Electoral bonds are available in denominations of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore. Until the latest window – October 2019 – a total of 12,313 electoral bonds of various denominations were sold. A major portion – 5,624 bonds – were in the highest value denomination of Rs 1 crore, followed by 4,877 bonds sold in the the next highest denomination of Rs 10 lakh. Electoral bonds with the highest denomination of Rs 1 crore form 91.76% of the total value. The value of Rs 10 lakh denominations amounts to 7.95% and Rs 1 lakh denominations 0.27%.

5,624 bonds were sold in denominations of Rs 1 crore, followed by 4,877 bonds in RS10-lakh denominations. Chart by IndiaSpend.
Chart by IndiaSpend.

Most bonds sold in Mumbai

Of its branches in 29 cities that sold electoral bonds, the SBI’s Mumbai branch witnessed the highest sales, worth Rs 1,879.96 crore. The second highest by value were sold in Kolkata, worth Rs 1,440.33 crore, followed by New Delhi with Rs 918.58 crore.

Hyderabad and Bhubaneswar, whose respective states also had Assembly elections during the last 18 months, recorded the fourth and fifth highest value of electoral bond sales. In terms of the number of bonds sold, Kolkata was at the top, with 3,478, followed by Mumbai at 2,899.

Of the Rs 6,129 crore worth of electoral bonds purchased, 99.67% – worth Rs 6,108 crore – were redeemed. In terms of the number of bonds, 12,173 of 12,313 electoral bonds were redeemed.

Political parties are required to redeem an electoral bond within 15 days, failing which the amount is transferred to the Prime Minister’s National Relief Fund. About Rs 20.25 crore has been transferred to the PMNRF due to non-redemption so far.

80.5% redeemed in New Delhi

Nearly half of these related to bonds purchased during the third phase in May 2018, while 74 of the 140 non-redeemed bonds belonged to the ninth phase in April 2019. New Delhi saw the largest share of electoral bonds redeemed: Rs 4,918 crore, nearly 80.5% of the total value, and 8,903 of 12,313 bonds were redeemed in the national capital.

The second highest amount of electoral bonds were redeemed in Hyderabad – Rs 512.3 crore from 1,255 bonds, followed by Bhubaneswar – Rs 236.5 crore from 484 bonds. Although the value of bonds redeemed in Mumbai and Kolkata was lesser than that in Bhubaneswar, the number of bonds was higher – 553 and 713, respectively.

As per the guidelines, no political party can have more than one current account in SBI for the redemption of these bonds.

Chart by IndiaSpend.

Audit reports awaited

The only source of information about the quantum of electoral bonds redeemed by various political parties would be their annual audit reports to be submitted to the Election Commission of India. These are due by October 30 for the preceding financial year.

As of now, no more than half the political parties have submitted their annual audit reports for 2018-’19. The Bharatiya Janata Party and the Indian National Congress, the two largest national parties, are yet to submit their audit reports for 2018-’19.

As per the audit reports submitted by the political parties for 2017-’18, 95% of electoral bonds purchased in 2017-’18 went to the BJP.

A correlation can be made with the city where the bonds are redeemed and the political party, since parties are required to redeem the electoral bonds only through a single bank account.

Hyderabad and Bhubaneswar, as mentioned earlier, saw the second- and third-highest value of electoral bonds being redeemed. The principal regional parties such as the Biju Janata Dal, Telangana Rashtra Samithi and YSR Congress Party were among the parties that declared substantial donations through electoral bonds in 2018-’19. These three parties together declared an income of more than Rs 450 crore through electoral bonds in 2018-’19.

Until October 2020

The total income through electoral bonds, as declared by the political parties who have submitted their audit reports for 2018-’19, amounts to Rs 599.07 crore, which is 23.5% of the total electoral bonds purchased in 2018-’19. The two national parties together could have cornered more than 70% worth of the bonds in 2018-’19.

The beneficiaries of the purchases made during April and May 2019, amounting to Rs 3,079 crore, will be known by October 2020 when the audit reports are submitted.

As of November 2019, nearly 76.5% of the electoral bonds purchased during 2018-’19 cannot be traced to any specific political party, defeating the purpose of such bonds. This delay also hampers any meaningful analysis of political and electoral funding, particularly as the non-disclosure clause in the scheme prevents disclosure of any information regarding the beneficiaries through RTI.

This article first appeared on Factly.