Opening remarks 0:07

Between March 2018 and January 2020, over a period of thirteen phases of sale of electoral bonds, a total of 12,452 bonds worth Rs 6210.39 cr were sold under the Electoral Bonds Scheme, 2018. Of these, 12, 312 bonds worth Rs 6190.14 cr were redeemed by political parties within the validity period. Political Parties are not required to disclose the name of the person/entity donating to a party through electoral bonds. Thus, the identity of not a single donor that purchased these bonds worth more than a total of Rs 6000 cr is known in the public domain!

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Welcome back to another episode of ADR Speaks! My name is Shelly Mahajan and I am a Program Associate at ADR.

Introduction 01:03

In this brand new episode, which is ninth in the podcast series launched by ADR, we look at the Electoral Bonds Scheme, 2018, introduced by the erstwhile Finance Minister, Shri Arun Jaitley, as a move aimed at making political funding more transparent. Whether or not the Scheme ushered in transparency in political finance is something that the listeners are encouraged to think over, after listening to the data analysed by ADR and discussed in this episode.

What is an electoral bond?

It is a bond issued in the nature of promissory note which shall be a bearer banking instrument. It neither carries the name of the buyer nor the payee (anonymous). A bearer instrument is one where no ownership information is recorded and the holder of the instrument is presumed to be the owner. The one in possession of the electoral bond (eligible political party in this case) is entitled to encash the same. Electoral bonds are available for purchase from the State Bank of India within a designated window of 10 days in every quarter of the financial year.

The Scheme, which was notified on January 2, 2018, allows individuals and domestic companies to donate these bonds — issued in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore — to political parties of their choice, which have to redeem them within 15 days. The amount of bonds not encashed within the validity period of fifteen days shall be deposited by the authorised bank to the Prime Minister Relief Fund (PMRF). So far, 140 bonds amounting to a total of Rs 20.25 cr were deposited in the PMRF. Thus, 99.67% of the bonds purchased during the thirteen phases were encashed by the political parties within the validity period.

Key findings 03:06

ADR analysed the total number and value of electoral bonds purchased and redeemed by the political parties, branch-wise and denomination-wise, in the thirteen phases from March 2018 to January 2020. The preliminary findings revealed that –

1. 32% of the total value of electoral bonds were purchased in two months alone – March and April 2019 – the period of general elections.
2. 81% or Rs 5702 cr of the total value of bonds purchased were in the denomination of Rs 1 crore indicating that these bonds are being purchased by corporates rather than individuals.
3. 8992 Electoral Bonds worth Rs 4976.81 cr or 80.40% of the total electoral bonds redeemed between March 2018 and January 2020 were encashed in New Delhi (while maximum value of bonds was purchased in Mumbai) where National Parties’ headquarters are located.
4. Between FY 2017-18 & 2018-19, political parties received a total of Rs 2,618.7 cr from electoral bonds. A whopping 63.42% or Rs 1,660.89 cr of this was received by a single party which is the ruling political party.
5. For the FY 2018-19, ADR analysis found that 4 National parties namely BJP, INC, NCP & AITC declared receiving a total of Rs 1960.68 cr while 7 Regional parties namely Biju Janata Dal (BJD), Telangana Rashtra Samithi (TRS), YSR-C, Shiv Sena (SHS), Telugu Desam Party (TDP), Janata Dal Secular (JDS) & Sikkim Democratic Front (SDF) received only Rs 578.49 cr from donations via electoral bonds.

05:17

On 5th March, 2019 ADR filed an application for stay against the sale/purchase of electoral bonds for Lok Sabha 2019 elections. ADR had contended that enormous amount of corporate funding would be received by political parties during the general elections and this would play a critical role in the elections. In response to ADR’s application, the SC in its interim order dated 12th April, 2019 directed all political parties to submit details of donations received via Electoral Bonds to the ECI in a sealed cover on or before 30th May 2019. ADR examined the eligibility of the political parties that submitted details to ECI in sealed cover complying with SC’s interim order, the findings of the analysis raised several questions on the execution of the Scheme.

1. Of a total of 69 registered unrecognised parties that submitted details to ECI in sealed cover, the vote share details of only 43 parties were available to assess their eligibility to receive electoral bonds.
2. Only 1 registered unrecognised party of the 43 parties analysed was found eligible to receive electoral bonds, as per the eligibility criteria mentioned in the Electoral Bond Scheme, 2018 i.e. parties have secured not less than one per cent of the votes polled in the last general election to the House of the People or the Legislative Assembly, as the case may be, shall be eligible to receive Electoral Bonds.
3. The vote share of the remaining 42 parties, that submitted details of donations received through Electoral Bonds to the ECI in sealed cover, range between maximum of 0.86% and minimum of 0.0003%.
4. Ten registered unrecognised political parties that submitted their required details in sealed cover to the Election Commission of India were registered in March and April 2019. None of these parties had contested any elections before the 2019 General Elections to Lok Sabha.
5. There is no list of political parties eligible to receive donations through Electoral Bonds, as per the eligibility criteria mentioned in the Scheme, available in the public domain or on the website of the ECI. In a reply to ADR’s RTI application dated 10th October, 2019, ECI responded that it has not compiled any such list.

Key take-away 07:57

Clearly, there seems to be no scrutiny by any authority at any stage prior to redemption of electoral bonds by political parties not eligible to encash bonds under the Electoral Bonds Scheme, 2018. The Scheme mentions that the bond can be encashed only by an eligible political party by depositing the same in their designated bank account, raising the question that how political parties which fail to meet the required eligibility under the Scheme have submitted details on Electoral Bonds to ECI in sealed cover.

Conclusion 08:35

The above analysis and data shows that electoral bonds infringe the citizen's fundamental ‘Right to Know’ by withholding crucial information regarding electoral funding. Such opaqueness is at the cost of larger public interest and is a severe blow to the very fundamentals of transparency and accountability. Not only did the SC declined to stay the operation of the Electoral Bonds Scheme despite several reservations against the functioning of the Scheme & media exposés but the matter continues to remain pending in the court.

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Well, that’s all for today’s episode. I hope you all found this useful and interesting. If you like our work, make sure you subscribe to the podcast on our website: adrindia.org and don’t forget to write to us at [email protected] with your feedback. We will be back in two weeks with another amazing episode. Please stay tuned and thank you for listening.

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