Data shows 99.9% of all electoral bonds bought so far are worth Rs 10 lakh or 1 crore. These bonds do not bear name of the donor.
New Delhi: Electoral bonds, brought in to make the system of political funding “more transparent”, seem to have further concentrated donations in the hands of corporates and other high net-worth donors, instead of democratising them. Nearly 100 per cent of the bonds purchased so far have been for the highest denominations of Rs 10 lakh and Rs 1 crore.
According to data obtained from the State Bank of India — the authorised bank to issue these bonds — by the website factly.in, in the fourth and latest cycle in July, 99.7 per cent of the total electoral bonds purchased were worth these high denominations. Not a single bond worth Rs 1,000 or Rs 10,000 was purchased.
Also read: Finance ministry’s own division shares EC’s concerns on electoral bonds & transparency
Even in the first three cycles of electoral bond sales, the demand for lower denomination bonds was abysmally low. Overall, of the total bonds purchased so far, those of denominations of Rs 10 lakh and Rs 1 crore account for 99.9 percent. Even among these, it is the bonds of Rs 1 crore that are more popular, amounting to 87.5 per cent of the total electoral bond purchases so far.
What are electoral bonds?
Electoral bonds, announced in the Union Budget of 2017-18, were notified in January this year. The bonds, issued in denominations of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore, can be bought by any donor with a KYC-compliant account. Parties can then cash the bonds via their verified accounts within 15 days.
The bonds do not bear the name of the donor, and the details are not made public. The idea is that donors can buy these bonds to route their donations to political parties without revealing their identities.
Transparency debate
The fact that donations through electoral bonds remain anonymous as well as tax exempt, and given most have been of high value, has raised concerns among experts.
In a Facebook post earlier this year, finance minister Arun Jaitley had defended electoral bonds, saying this would “enable clean money and substantial transparency being brought into the system of political funding”.
But former Chief Election Commissioner S.Y. Quraishi, who has been a vocal critic of this new scheme, criticised it again when asked about this new data.
“Electoral bonds are not a reform; they are, in fact, a deform. They have brought in no transparency whatsoever. We have no idea who the donors are and what quid pro quo there is. This is a poor policy decision and these numbers prove exactly that,” he said.
Also read: Law Ministry upholds EC concerns on electoral bonds, says they ‘appear genuine’
S.K. Mendiratta, legal adviser to the Election Commission of India for over five decades, said electoral bonds have made the system “totally opaque”.
“It basically means you can donate huge amounts to political parties with nobody knowing who the donors are. Earlier, cash donations of over Rs 20,000 could not be anonymous, so at least one could track who had received what benefits out of donating to a party. This system kills all that,” said Mendiratta, whose association with the EC ended on 1 April.
“The numbers clearly show it is mostly corporates or the very rich who are using the electoral bonds route.”
Intuition suggests that the amounts being donated to political parties through these anonymous bonds are a tiny fraction of funds actually mobilised for political activity / fighting elections. Perhaps these amounts cover items of expenditure that must normally be paid by cheque – hiring of aircraft / helicopters, advertising in conventional media, etc.