Electoral Bonds worth more than ₹ 3000 crores were purchased and redeemed in April & May 2019, coinciding with the Lok Sabha general elections. Even after 18 months, we still do not know who benefitted from these bonds as political parties are yet to submit their annual audit reports & contribution reports for 2019-20.
On 16 October 2020, Government of India announced the 14th Phase for sale of Electoral Bonds under Electoral Bond Scheme 2018. As per the announcement, State Bank of India (SBI) is authorized to issue and redeem the electoral bonds through its 29 Authorized branches. The window period for the sale and redemption of the Electoral Bonda under the 14th phase was 19 October 2020 to 28 October 2020. This is the second sale cycle for the year 2020, after the January 2020 sale cycle.
Value of Bonds purchased in the current phase nearly four times the previous phase
The total value of bonds purchased in the previous phase i.e. the 13th phase was the third lowest since the scheme was launched. Compared to earlier this year, the value of bonds purchased in the most recent phase i.e. 14th phase is nearly 4 times higher with bonds worth ₹ 282.29 crores being purchased. When compared with all the earlier phases, this phase ranks 6th in terms of the value of bonds purchased.
The latest phase was just prior to the Bihar Assembly elections and a host of by-elections across the States, most of them in Madhya Pradesh. In fact, this is the highest in terms of value of bonds purchased in any phase after the General Elections of 2019.
Contrary to the trend observed in the last three phases where in all the purchased bonds were redeemed by the Political parties, there was one electoral bond worth ₹ 1000 not redeemed during the 14th phase. The equivalent amount was transferred to PMNRF as per the scheme guidelines. However, going by overall trend in the last few phases, we can conclude that the political parties have not left behind any bonds.
By value, more than 98% of the bonds purchased were of ₹ 1 Crore denomination
A total of ₹ 282.29 crores worth of electoral bonds were purchased in the 14th phase. This is a total of 321 Electoral Bonds. Of these, 279 Electoral Bonds were of ₹ 1 crore denomination, 32 bonds of ₹ 10 lakh denomination and 9 bonds of ₹ 1 lakh denomination. The remaining one bond was of ₹ 1000 denomination. In all, more than 98% of the bonds by value were purchased in the denomination of ₹ 1 crore.
After the 10th Phase in May 2019, this was the first time that a bond of ₹ 1000 denomination was purchased. Factly had earlier written about how 99.9% of printed electoral bonds of ₹ 1000 and ₹10000 denomination remaining unsold.
Compared to the previous phase, the proportion of ₹1 crore denomination bonds out of the total bonds purchased is higher.
Most bonds purchased in Mumbai while the most were redeemed in Hyderabad
During the 14th Phase, electoral bonds were purchased in 9 different cities. Among them, the greatest purchase – both in terms of number as well as the value was in Mumbai. A total of 130 bonds were purchased in Mumbai which were worth ₹ 130 crores. It is followed by Chennai, where in 60 Bonds were purchased worth ₹ 60 crores. Unlike these two cities, the bonds purchased in Kolkata were of varying denominations. In Kolkata, 45 bonds of worth ₹ 36 crores were purchased. Patna, the capital of Bihar where the Assembly elections took place had purchases of only ₹ 80 lakhs.
Meanwhile, bonds worth ₹ 6 crores were redeemed in Patna. Although Mumbai is the city where the greatest purchase of electoral bonds during this 14th phase happened, none were redeemed in Mumbai.
Bonds were redeemed in 6 different cities during the 14th phase. Of these, the greatest both in terms of number & value were redeemed in Hyderabad. In Hyderabad, bonds worth ₹90 cores were redeemed through 90 Electoral bonds. Chennai and Bhubaneshwar occupy the next two positions with redemption of bonds worth ₹ 80 crores and ₹ 67 crores respectively.
The higher redemption of bonds in Hyderabad could have been due to an assembly bye-election and the Hyderabad corporation (GHMC) elections.
The beneficiaries of ₹ 3400 crores worth of electoral bonds during 2019-20 is yet unknown
As observed in the chart above, Chennai & Bhubaneshwar are among the cities where a higher number of electoral bonds were redeemed during the 14th phase. While Odisha had bye-elections for two assembly seats during November 2020, Tamil Nadu did not have any scheduled election during this period. In fact, the Tamil Nadu assembly general elections will take place only during April-May 2021.
However, ascertaining a link between the redemption of bonds and potential elections is only speculation based on earlier trends. The only authentic way of knowing which political parties benefitted from electoral bonds through the Audit & Contribution reports submitted by them.
In an earlier story, we had highlighted about the long periods one has to wait to know about the beneficiaries of these bonds.
While we have to wait for until late next year to know who benefitted from the higher redemption in Hyderabad, Bhubaneswar & Chennai during the 14th phase, we still do not know about the beneficiaries of the bonds redeemed in 2019-20.
During the financial year 2019-20, a total about ₹ 3400 crores worth of electoral bonds were redeemed during 5 phases (Phase IX-XIII). Of this, a major chunk is ₹ 3.07 thousand crores belonging to Phase -IX (April’2019) & Phase-X (May’2019), during the Lok Sabha general elections in 2019.
Even after nearly 18 months, the information of the beneficiaries of these bonds is not yet available as the major political parties are yet to submit their Audit & Contributions reports for 2019-20. The waiting time only increases because political parties usually do not submit these reports on time. This lack of real time information is a major lacuna preventing common citizens from knowing the beneficiaries of these bonds.
While these reports are supposed to be submitted by end of October 2020, information available on the Election Commission of India (ECI) website reveals that only 4 State parties (AIUDF, RLD, AIADMK & YSRCP) and none of the National Parties have submitted their Contribution reports for 2019-20. Furthermore, none of the political parties have submitted the Audit reports for 2019-20.
As highlighted earlier, the delay in submission of contribution & audit reports hampers any efforts to analyse these bonds & their beneficiaries. While countries like the USA provide near real time information on political funding, the waiting time in India is more than 18 months going by the current trends.