Poll Bonds: The Supreme Court's landmark order banned electoral bonds, declaring them unconstitutional due to concerns about transparency and accountability. The ruling BJP received the majority of funds through these bonds, significantly increasing its income. Other parties also relied on electoral bonds for financial support.
In a landmark ruling the Supreme Court on Thursday banned electoral bonds that had become a major source of funding for political parties in India.
The scheme, termed 'unconstitutional' now by the apex court, contributed over Rs 12,000 crore to political parties' coffers till last fiscal since its inception in 2018. Among the beneficiaries, the ruling Bharatiya Janata Party (BJP) stands out, receiving a lion's share of around 55%, or approximately Rs 6,565 crore, PTI reported citing data from the Election Commission and the Association for Democratic Reforms (ADR).
Rs 16,518.11 crore has been recieved by political parties between March 2018 and January 2024 through electoral bonds.
These bonds, which allow for anonymous donations, have been a key component of political funding, with some regional parties relying heavily on them for financial support.
For the BJP, electoral bonds constitute more than half of its overall income, indicating their crucial role in sustaining political campaigns.
However, the recent ruling by the Supreme Court has thrown the future of such funding into uncertainty. The court declared the scheme unconstitutional, citing concerns about transparency and accountability in political funding. Chief Justice of India DY Chandrachud highlighted the importance of upholding fundamental rights and expressed reservations about the efficacy of electoral bonds in curbing so-called black money in politics.
Moreover, State Bank of India, the sole authorised seller of electoral bonds, has been instructed to disclose details of donations made through these bonds and provide information about the recipients.
Since the introduction of electoral bonds, the BJP's income has surged and it became the wealthiest party in India, toppling its rival, the Indian National Congress, which saw a decline in the fortunes except for a few years.
In the fiscal year 2018-19, after the introduction of electoral bonds, the BJP's income more than doubled from Rs 1,027 crore to Rs 2,410 crore, while the Congress also saw a significant increase from Rs 199 crore to Rs 918 crore.
During the fiscal year 2022-23, the BJP's total income was Rs 2,360 crore, with nearly Rs 1,300 crore coming from electoral bonds. In contrast, the Congress's total income dropped to Rs 452 crore, with Rs 171 crore from electoral bonds.
In the fiscal year 2021-22, the funds received through electoral bonds by the BJP increased to Rs 1,033 crore, whereas the Congress's intake decreased from Rs 236 crore.
Other parties received varying amounts through electoral bonds in the last fiscal year. TMC received Rs 325 crore, BRS received Rs 529 crore, DMK received Rs 185 crore, BJD received Rs 152 crore, and TDP received Rs 34 crore. However, the Samajwadi Party and Shiromani Akali Dal did not receive any contributions through electoral bonds during this period.
Almost 50% of the funds in electoral bonds come from corporates, while the rest is from "other sources".
An electoral bond is a financial tool used for donating to political parties. It operates like a bearer instrument, meaning the buyer's or payee's name is not listed, ensuring donor anonymity. There is no maximum limit on the number of bonds one can purchase or donate. These bonds are available in various denominations, including Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore, with the Rs 1 crore denomination being the most popular.
Political parties need to redeem these bonds within 15 days of receiving them. If they fail to do so, the funds are transferred to the PM National Relief Fund.