Domestic Bonds

Election bonds worth Rs 614 crore sold in October


As state elections approached in Goa, Manipur, Punjab, Uttarakhand and Uttar Pradesh, political parties received funds worth Rs 614 crore from donors in the form of election bonds in October, data shows of the State Bank of India (SBI).

In response to a right to information request, filed by transparency activist Commodore Lokesh Batra, SBI said 33 95,000 election bonds worth Rs 614 crore were sold between October 1 and October 10. 2021. SBI is the only bank authorized to sell these bonds,

Analysis of the data shows that over 90% of the election bonds purchased were denominated in one crore, indicating that the companies bought the majority of the bonds.

From October 1 to 10, the main branch of SBI in Kolkata sold the maximum number of bonds valued at Rs 200 crore. This was followed by Chennai and Hyderabad at Rs 195 crore and Rs 140 crore, respectively. The maximum election bonds collected came from the Hyderabad branch for Rs 153 crore, followed by Kolkata (Rs 140 crore) and Bhubaneswar (Rs 125 crore).

Since the creation of Election Bonds in 2018, the bonds have been sold in 18 phases. A comparison of all seventeen phases since March 2018 shows that the 18th phase (October 1 to October 10, 2021) is the fifth highest in terms of quantity sold.

The Election Bond is an interest-free bearer instrument issued to any Indian citizen or national business to donate to a political party that obtained at least one percent of the vote in the last Lok Sabha or state election.

Bonds can be purchased in denominations of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore, from specific branches of the State Bank of India during four phases of 10 days per year. Once the donation is made, political parties have 15 days to repay the obligation. While bond buyers must submit Know Your Customer (KYC) details, a verification procedure performed by banks, bearer instruments do not contain any ownership information.

The point of contention regarding electoral obligations is that political parties do not have to disclose the identity of donors in their annual contribution report submitted to the Election Commission of India (ECI). This bond clause is currently being challenged in the Supreme Court.

In July 2021, the Communist Party of India (Marxist) appealed to the Supreme Court, requesting an urgent hearing on the issue of electoral obligations. This month, lead attorney Prashant Bhushan, who is appearing for ADR, urged the Supreme Court, now headed by Chief Justice NV Ramana, to prioritize the case.

The Election Commission submitted the affidavit as part of a petition filed with the Supreme Court by ADR and Common Cause, which challenged the validity of the draft in September 2017.

From March 2018 to July 2021, election bonds worth Rs 7,380 crore were sold. Of those, 92% were sold in one crore denomination, according to the Association of Democratic Reform.

With the addition of Rs 614 crore of election bonds sold during the eighteenth phase, that figure now stands at Rs 7,994 crore.

Highlighting the denomination in which the bonds were sold, transparency activist Lokesh Batra told India Today: “The sale of over 90% of election bonds denominated in Rs 1 crore suggests that it is the companies that are buying the most of the bonds, and that money is likely to be cashed for the next national election. “

According to Lokesh Batra, since the bonds are sold through SBI, the central government of Prime Minister Narendra Modi will be able to access data on donors, but not the opposition.

“Who can buy the one crore bond?” Obviously, businesses. And when they buy it, there will be a consideration, ”he said.

“The party in power can make sure that the company that pays another party stops paying. You know what the current climate is like in the country, ”he added.

For 2019-2020, analysis of data from the audit report submitted by political parties to the Election Commission of India showed that over 76% (Rs 2,555) of the Rs 3,435 of electoral bonds sold was intended for the ruling Bharatiya Janata party. Congress came in second with Rs 318 crore, or nine percent of total election bonds sold.

Mamata Banerjee Trinamool Congress raised Rs 100.46 crore, Dravida Munnetra Kazhagam Rs 45 crore, Sharad Pawar Nationalist Congress Party Rs 29.25 crore, Arvind Kejriwal’s Aam Aadmi Party 18 crores Rupees and Rashtriya Janata from Lalu Prasad Yadav 2.5 crores from Dal Rs.

The next bond opening will take place in January next year and Lokesh Batra believes that a high amount of bonds will be bought with the 5 state elections in mind.

Bonds are open on the first 10 days of January, April, July and October. An additional 30-day period will be specified by the government in the year of Lok Sabha’s election.

Election bonds are valid for 15 calendar days from the date of issue and currently 29 branches of the SBI have been authorized to sell them.