Unveiling the Electoral Bond Scheme: Who Profited Most from Secret Donations? All You Need to Know

Since its inception in 2018, a total of Rs 16,518.11 crore worth of electoral bonds have been sold by the State Bank of India, including the most recent issuance.

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The Supreme Court has delivered a unanimous verdict on a batch of pleas challenging the legal validity of the Central government’s Electoral Bond scheme, which allows for anonymous funding to political parties.

The court concluded that undisclosed contributions to political parties violate the right to information and Article 19(1)(a) of the constitution. SC observed that infringement to the Right to Information is not justified for the purpose of curbing black money.

In its ruling, the top most court of the country emphasized the significance of political parties in the electoral process, highlighting that transparency regarding their funding is crucial for informed electoral decisions.

According to the Government of India, an Electoral Bond was a bearer instrument resembling a Promissory Note and was an interest-free banking instrument. Eligibility to purchase the bond was extended to citizens of India or bodies incorporated in India. Electoral Bonds could be issued/purchased for various denominations, including Rs. 1,000, Rs. 10,000, Rs. 1,00,000, Rs. 10,00,000, and Rs. 1,00,00,000, from specified branches of the State Bank of India (SBI).

To buy Electoral Bonds, the purchaser was required to adhere to all existing KYC norms and make payment from a bank account. The bonds did not bear the name of the payee and had a lifespan of 15 days, during which they could only be used to make donations to political parties registered under section 29A of the Representation of the Peoples Act, 1951, and securing at least one percent of the votes in the last general election to the House of the People or a Legislative Assembly.

Electoral Bonds were available for purchase for a period of 10 days each in the months of January, April, July, and October, as specified by the Central Government. Additionally, an extra 30 days were specified by the Central Government in the year of the General Election to the House of People.

An eligible political party could encash Electoral Bonds only through a designated bank account with the authorised bank.

The concept behind the implementation of the scheme

In 2018, the Modi government introduced the Electoral Bond Scheme, aiming to reform the electoral process by eliminating the old system where political parties often received anonymous cash donations, including potentially illicit funds. The government criticized the existing mechanism as lacking transparency.

The Electoral Bond Scheme was promoted as a transparent alternative, requiring eligible political parties recognized by the Election Commission of India (ECI) to receive donations in designated bank accounts.

The late Finance Minister, Arun Jaitley, argued that while online donations or checks were preferable, the requirement to disclose the donor’s identity often led them to opt for cash donations. He asserted that the electoral bond scheme ensured all political funding transactions were conducted through banking instruments, presenting a significant improvement over the non-transparent cash donation system.

He contended that the electoral bond scheme provided donors with the option of transparent methods such as checks, online transactions, or electoral bonds, all involving clean money. This contrasted with the existing system, which he described as involving entirely unclean money and lacking transparency.

Who benefited the most from Electoral Bonds?

Since its inception in 2018, a total of Rs 16,518.11 crore worth of electoral bonds have been sold by the State Bank of India, including the most recent issuance.

Out of the total value of electoral bonds amounting to Rs 12,008 crore sold between 2018 and 2023, the BJP received 55% or Rs 6,564 crore, while the Congress received only 9.5% of all bonds sold during the five-year period, totaling Rs 1,135 crore.

A recent report in The Hindu highlighted that a significant portion of the BJP’s income, accounting for 54% in the year 2022-23, came from electoral bonds, totaling Rs 2,120.06 crore. Over the six-year period from 2018 to 2023, more than 52% of the BJP’s total donations, valued at Rs 5,271.9751 crore, came from electoral bonds, as reported by the Association for Democratic Reforms.

Since their introduction, transparency advocates have raised significant concerns about the Modi government’s electoral bonds scheme, including its implementation without addressing concerns raised by the then Reserve Bank of India governor and without conducting public consultations.

Also Read: Sanjay Raut’s Scathing Attack on PM Modi: Farmers on Protest; Prime Minister on Tour

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