What’s wrong with ‘Electoral Bonds’?

Following the Supreme Court’s interim directions on ‘Electoral Bonds’, there has been an intense debate about Electoral Bonds. Latest data from SBI shows that in March 2019, more than 77% of the electoral bonds were redeemed in Delhi.

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The Supreme Court (SC) had recently passed interim directions on the issue of ‘Electoral Bonds’ that mandates political parties to disclose in a sealed cover to the Election Commission of India (ECI), the names of donors of these bonds by 30^th May, 2018. Latest data from SBI reinforces the fact that some parties could be the receiving disproportionate amount of electoral bonds compared to others. (Watch this video to learn more about the Political Funding in India)

The March 2019 story

Electoral Bonds were on sale for the first 15 days of March 2019 at the 29 SBI branches across the country. As per data shared by SBI in response to an application under RTI, a total of 2742 bonds were purchased in 11 branches (states) across the country, amounting to Rs. 1365.69 crores. To put this amount in perspective, the amount of electoral bonds purchased in March 2019 is more or less equal to the amount of bonds purchased in the previous 7 phases till January 2019. In those 7 phases, 3071 bonds worth Rs. 1407.09 crores were purchased.

Phase Details	Number of Bonds Purchased	Amount of Bonds Purchased in Rs. Crore
7 Phases till January 2019	3071	1407.09
March 2019	2742	1365.69
Total (8 Phases)	5813	2772.78

National Parties, the principal beneficiaries

As per the guidelines of the scheme, no political party can have more than one current account in SBI for the redemption of these bonds. So it is natural that the national parties maintain such a current account in Delhi while the regional parties in the respective state capitals.

In March 2019, more than 77% of the bonds redeemed in Delhi

The data from the SBI makes it amply clear that national parties are the principal beneficiaries of the electoral bond scheme. While more than 1/3rd of the bonds in March 2019 were purchased in Mumbai, only 3.4% were redeemed in Mumbai. Hyderabad, where almost 18.9% of the bonds were purchased in March 2019 saw only 10.4% bonds being redeemed. On the other hand, only 13.2% of the bonds were purchased in Delhi while 77.4% of the bonds were redeemed from there. It can be concluded that all of this 77.4% must have gone to the national parties. Going by the past data of 2017-18, the BJP could have been the biggest beneficiary even in 2018-19.

Purchased in 11 States, Redeemed only in 5

The data also indicates that while bonds were purchased in 11 different states in March 2019, they were redeemed only in the 5 states of New Delhi, Maharashtra, Telangana, Odisha & West Bengal. It has to be noted that the first phase of elections were held on 11th April 2019 in about 20 States/UTs while the bonds were redeemed only in 5.