Hyderabad: More than Rs 6,000 crore worth of electoral bonds have been sold in 12 cycles since January 2018, 55% of these in 2019-20, but which parties received how much will only become clear by October 2020 when political parties’ audit reports are due.

Electoral bonds were introduced by the central government in January 2018 with the purported aim to check the flow of unaccounted money into--and improve the financial transparency of--India’s political system.

However, their effectiveness for these purposes, and the scope for their misuse, have been debated, because in effect electoral bonds have made political donations non-traceable as the identities of neither the donor nor the donee have to be disclosed.

Although the seller bank, the State Bank of India (SBI) alone at present, must conduct the usual KYC (know-your-customer) verifications, and payments for purchase of bonds are to be made by cheque, draft or online transfer, SBI is obligated to not disclose the donor’s identity except if ordered by a court or demanded by a law enforcement agency.

Here’s what data accessed by Factly through multiple Right to Information applications and from an analysis of information received from SBI shows.

Largest volume sold in April 2019

Since March 1, 2019, till date, 12 windows were opened for the purchase of electoral bonds across various SBI branches in different cities. The eighth and ninth phases were during March and April 2019, and had the longest windows of 15 and 20 days, respectively.

Phase Dates Duration in days Branches
ONE 1st March to 9th March 2018 9 4
TWO 02nd April to 10th April 2018 9 11
THREE 01st May to 10th May 2018 10 11
FOUR 02nd July to 11th July 2018 10 11
FIVE 01st October to 10th October 2018 10 29
SIX 01st November to 10th November 2018 10 29
SEVEN 01st January to 10th January 2019 10 29
EIGHT 01st March to 15th March 2019 15 29
NINE 01st April to 20th April 2019 20 29
TEN 06th May to 10th May 2019 5 29
ELEVEN 01st July to 10th July 10 29
TWELVE 01st October to 10th October 2019 10 29

Source: Data accessed by Factly through Right to Information applications

The highest value of electoral bonds sold was during the ninth phase from April 1-20, 2019--Rs 2,256 crore ($304 million) worth of electoral bonds. The next highest was during the eighth phase, March 1-15,, 2019 (bonds worth Rs 1,365 crore).

In the 10th phase, which was of a shorter duration of five days from May 6-10, 2019, the third highest amount of electoral bonds worth Rs 822.25 crore were sold.

All these phases were during the 2019 Lok Sabha elections, when electoral bonds worth Rs 4,444.32 crore ($619 million)--close to 73% of all electoral bonds by value sold thus far--were sold.

55% of electoral bonds by value sold in 2019-20

So far in 2019-20, a total of Rs 3,355.93 crore worth of electoral bonds have been sold. This is higher than in the entire previous financial year, when Rs 2,550.78 crore’s worth were sold.

The financial year 2017-18, which had only one phase--the first phase during March 2018--recorded purchases worth Rs 220 crore.

99.7% purchased in Rs 1 crore, Rs 10 lakh denomination

Electoral bonds are available in denominations of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore. Until the latest window (October 2019), a total of 12,313 electoral bonds of various denominations were sold.

A major portion were in the highest value denomination of Rs 1 crore (5,624 bonds) followed by the next highest denomination of Rs 10 lakh (4,877 bonds).

Electoral bonds with the highest denomination of Rs 1 crore form 91.76% of the total value. The value of Rs 10 lakh denominations amounts to 7.95% and Rs 1 lakh denominations 0.27%.

Most bonds sold in Mumbai, Kolkata, New Delhi

Of its branches in 29 cities that sold electoral bonds, the SBI’s Mumbai branch witnessed the highest sales, worth Rs 1,879.96 crore. The second highest by value were sold in Kolkata, worth Rs 1,440.33 crore, followed by New Delhi with Rs 918.58 crore.

Hyderabad and Bhubaneswar, whose respective states also had assembly elections during the last 18 months, recorded the fourth and fifth highest value of electoral bond sales.

In terms of the number of bonds sold, Kolkata was top with 3,478, followed by Mumbai with 2,899.

80.5% redeemed in New Delhi

Of the Rs 6,129 crore worth of electoral bonds purchased, 99.67% (worth Rs 6,108 crore) were redeemed. In terms of the number of bonds, 12,173 of 12,313 electoral bonds were redeemed.

Political parties are required to redeem an electoral bond within 15 days, failing which the amount is transferred to the Prime Minister’s National Relief Fund (PMNRF). About Rs 20.25 crore has been transferred to the PMNRF due to non-redemption so far. Nearly half of these (worth Rs 10 crore) related to bonds purchased during the third phase (May 2018), while 74 of the 140 non-redeemed bonds belonged to the ninth phase (April 2019).

New Delhi saw the largest share of electoral bonds redeemed: Nearly 80.5% of the total value (Rs 4,918) crore and 8,903 of 12,313 bonds were redeemed in the national capital.

The second highest amount of electoral bonds were redeemed in Hyderabad (Rs 512.3 crore) from 1,255 bonds; followed by Bhubaneswar with Rs 236.5 crore from 484 bonds. Although the value of bonds redeemed in Mumbai and Kolkata is lesser than that in Bhubaneswar, the number of bonds was higher--553 and 713 respectively.

As per the guidelines, no political party can have more than one current account in SBI for the redemption of these bonds.

Audit reports awaited

The only source of information about the quantum of electoral bonds redeemed by various political parties would be their annual audit reports to be submitted to the Election Commission of India (ECI). These are due by October 30 for the preceding financial year.

As of now, no more than half the political parties have submitted their annual audit reports for 2018-19. The Bharatiya Janata Party (BJP) and the Indian National Congress, the two largest national parties, are yet to submit their audit reports for 2018-19.

As per the audit reports submitted by the political parties for 2017-18, 95% of electoral bonds purchased in 2017-18 went to the BJP.

A correlation can be made with the city where the bonds are redeemed and the political party since parties are required to redeem the electoral bonds only through a single bank account.

Hyderabad and Bhubaneswar, as we said, saw the second and third highest value of electoral bonds being redeemed. The principal regional parties such as the Biju Janata Dal (BJD), Telangana Rashtra Samithi (TRS) and YSR Congress Party (YSRCP) were among the parties that declared substantial donations through electoral bonds in 2018-19. These three parties together declared an income of more than Rs 450 crore through electoral bonds in 2018-19.

Until October 2020

The total income through electoral bonds as declared by the political parties who have submitted their audit reports for 2018-19 amounts to Rs 599.07 crore, which is 23.5% of the total electoral bonds purchased in 2018-19. The two national parties together could have cornered more than 70% worth of the bonds in 2018-19.

The beneficiaries of the purchases made during April and May 2019, amounting to Rs 3,079 crore, will be known by October 2020 when the audit reports are submitted.

As of November 2019, nearly 76.5% of the electoral bonds purchased during 2018-19 cannot be traced to any specific political party, defeating the purpose of such bonds. This delay also hampers any meaningful analysis of political and electoral funding, particularly as the non-disclosure clause in the scheme prevents disclosure of any information regarding the beneficiaries through RTI.

First published here on Factly.in

(Kancharla is a research associate with Factly.in)

We welcome feedback. Please write to respond@indiaspend.org. We reserve the right to edit responses for language and grammar.