The 19th phase of sale under the ‘Electoral Bond scheme 2018’ took place during the first 10 days of January 2022, in light of the upcoming assembly general elections in five states. This phase saw sales of EBs worth more than Rs. 1200 crores, the third highest value of the sale in a single-phase since the introduction of the scheme. Here is a low-down on the numbers from the 19th phase of EBs sale.
The Government of India announced the 19th Phase of ‘Electoral Bond Scheme 2018’ on 30 December 2021. The State Bank of India (SBI) was authorized to sell the Electoral Bonds under the 19th Phase during the period, 01 January 2022, and 10 January 2022. The previous 18th phase of sale was during October 2021.
With upcoming general elections for State Assemblies in 5 states during February & March 2022 and other assembly & parliament by-elections coupled with local body elections during this period, the sale of the 19th Phase of Electoral Bonds assumes importance.
In the story, we look at the data relating to the purchase & redemption of electoral bonds (EBs) during the 19th Phase of the Electoral Bond Scheme. Details of the Electoral Bonds across the various phases since the launch of the scheme can be viewed on Factly’s comprehensive Dashboard on this issue – Electoral Bonds – The Numbers.
The third greatest value of Electoral Bonds purchased during the 19th Phase
A total of 2068 EBs worth Rs.1.21 thousand crores were sold by SBI during the 19th Phase of the scheme. This is the greatest value of purchase since April 2019 (during the 9th Phase) when 4681 EBs worth Rs. 2.25 thousand crores were purchased. The only other phase that had a higher value of the sale of bonds than the 19th Phase was the 8th Phase. Both the 8th & 9th phases of the sale were before the 2019 General elections to Lok Sabha & Assembly elections in 4 states.
The greatest value of EBs sold between May 2019 & the recent 19th phase was during April 2021, which coincided in Assembly general elections in 5 states. The sale value during the 19th phase is much higher than during April 2021. As five states including the largest state of Uttar Pradesh go to the polls, the amount of sales in the 19th phase is hardly surprising.
56% of the EBs purchased during the 19th Phase were of 1 Crore Denomination
Out of the 2068 EBs purchased during the 19th Phase, 1156 i.e., 56% of all the EBs purchased, were of Rs. 1 Crore denomination. Around 26% were of Rs. 10 lakh denomination and 17.6% were of Rs. 1 Lakh denomination. Only 1 EB of Rs. 1 thousand Denomination and 10 EBs of Rs. 10 thousand denomination were purchased.
The lower demand for EBs of the lower denomination is in line with the trend since the inception of the scheme. In all the 19 phases, only 56 bonds of Rs. 1 thousand denominations and 132 bonds of Rs. 10 thousand denominations were purchased. We had earlier written about the lower demand for the low valued EBs and how most of these low-value bonds that are printed have remained unsold. The proportion of the purchases during the 19th phase in terms of the denomination is consistent with the general trend in most other phases where the higher value of EBs was purchased in higher denominations with Rs. 1 Crore EBs leading the pack followed by Rs.10 lakhs & Rs. 1 Lakh respectively.
Greatest Value of Bonds purchased in Mumbai followed by Chennai
During the 19th Phase, EBs were purchased in 12 different cities. The greatest in terms of number and value was in Mumbai.
- 548 out of the 2068 EBs purchased during this phase were in Mumbai. In terms of value, it is Rs. 489.5 crores i.e., 40% of the total value of EBs purchased in this phase. 485 EBs of Rs. 1 crore denomination were purchased in Mumbai.
- In terms of the number of bonds purchased, Kolkata is second in the list with 491 EBs but in terms of value, it is the third highest with Rs. 154.48 crores worth of EBs. Denominations of Rs.1 lakh (157) & Rs. 10 lakhs (189) were purchased more in Kolkata than that of Rs. 1 Crore (134).
- The same is the case with Panaji, which has the third-highest number of EBs purchased at 252, but the value is only Rs. 16.65 crores. 175 of the 252 EBs purchased in Panaji were of Rs. 1 lakh denomination.
- During the 19th phase, EBs of the second greatest value was purchased in Chennai with Rs. 227.5 crores. 227 bonds of Rs. 1 crore denomination were purchased in Chennai. Hyderabad & New Delhi were the other cities with higher value of purchases.
By Value, 65% of the EBs were redeemed was in New Delhi
The EBs are valid for a period of 15 days from the date of purchase. During the 19th phase, Rs. 40 lakh worth of EBs were not redeemed. EBs worth Rs. 1212.86 crores were redeemed in 9 cities. The major share of the redeemed EBs was in New Delhi.
- Rs. 784.85 crores i.e., around 65% of the total EBs by value were redeemed in New Delhi through 1409 EBs.
- Rs. 224.2 crores were redeemed in Kolkata through 361 bonds. Rs. 100 crores were redeemed in Chennai through 100 bonds.
- Mumbai, which recorded the highest value of purchases, accounted for the redemption of only Rs. 39.2 crores worth EBs through 50 bonds.
- Rs. 90 lakhs through 45 bonds were redeemed in Panaji, capital of Goa, which is one of the poll-bound states.
Lack of timely information about the beneficiaries of Electoral Bonds
In an earlier story, we had highlighted the long wait period before a common citizen is able to know about the beneficiaries of the EBs. The earliest that one can know about the beneficiaries of the 19th Phase of electoral bonds is only during the latter part of this year when the political parties are required to submit their Annual Audit reports.
But considering the existing delay by political parties in the submission of their audit reports, this can further get delayed. As on date, only 2 of the 7 recognized National parties have submitted the Annual Audit report for the previous year i.e., 2020-21.
While not exact, inference can be drawn regarding the potential beneficiaries by looking at the earlier trends and the place of purchase & redemption. The highest value of bonds being redeemed in New Delhi could mean that the large national parties like the BJP & the Congress, could be major beneficiaries. The other national parties like TMC, BSP could also be potential beneficiaries since they have an account in New Delhi.
The historical data indicates that EBs redeemed in a city other than New Delhi could be by a key regional/state party in that particular state. While only Rs. 3.21 crores are redeemed in Lucknow, there is a high possibility that this could be by the Samajwadi Party which is a key state party in Uttar Pradesh.
The same can be said about Aam Aadmi Party (AAP), another regional party being among the main contenders in Punjab & Goa, with a base primarily in Delhi. This could also explain the reason for lower redemption in Chandigarh where only Rs. 50 lakhs worth EBs were redeemed. Though Chandigarh is the capital of Punjab, 3 of the 4 major political parties contesting the Punjab elections are the Congress, AAP & BJP.
While there are no assembly elections in Tamil Nadu & West Bengal, the higher number of bonds purchased & redeemed in Chennai & Kolkata could be due to local body elections in these states. TMC contesting elections in Goa and other places could also be a reason. Earlier, a high value of EBs was redeemed in Hyderabad when the local corporation elections were held.
However, all these are conjectures based on past trends. The actual details of beneficiaries along with the volumes will only be known after the submission of Audit reports by the political parties for the year 2021-22.