Political parties must declare the amount of money they received through the bonds, but don't have to reveal the identity of the donors.
Electoral bonds, the controversial instruments of donation to political parties, are again in the spotlight after the finance ministry said the latest tranche will be up for sale later this month.
The government has pitched electoral bonds as a transparent alternative to cash donations made to political parties, but anti-corruption activists point to various loopholes in the system. Activists say electoral bonds obscure the deep ties between political parties and businesses because donors can buy as many bonds as they want without having to reveal their identity. Though political parties must declare the amount of money they received through the bonds, they don't have to reveal the identity of the donors.
The sale of the 13th tranche offering will take place from January 13 to January 22 through the State Bank of India's (SBI) 29 branches.
The government is pressing ahead with the sale of these bonds despite outcry from activists and political reform activists. It is not hard to see why.
Since their launch, the ruling Bharatiya Janata Party (BJP) has secured the lion's share of donations through electoral bonds. The BJP raised more than Rs 1,450 crore through electoral bonds ahead of the 2019 Lok Sabha elections. That amount constituted roughly 60 percent of the total Rs 2,354 crore the party collected as "voluntary contributions", according to 2018-19 data submitted to the Election Commission.
The Opposition Congress party's collections pale in comparison. It was able to raise just Rs 383 crore , or 41 percent, of its total Rs 918 crore funding through electoral bonds, according to data passed to the EC.
Before electoral bonds as well, the BJP was raising record funding every year since 2013-14 and getting nearly Rs 1,000 crore annually from 2016-17, as per an Economic Times report.
Mamata Banerjee's Trinamool Congress, which rules West Bengal, raised Rs 192 crore in 2018-19, receiving Rs 97 crore, or a little over 50 percent of it from electoral bonds.
The Communist Party of India (Marxist) raised Rs 100 crore in 2018-19 and hasn't declared any funding received through electoral bonds.
Mayawati-led Bahujan Samaj Party (BSP) and the Communist Party of India (CPI) have also not declared any amount coming through electoral bonds.
Overall, more than Rs 6,000 crore worth of electoral bonds have been sold in 12 cycles since January 2018, 55 percent of these in 2019-20, according to an IndiaSpend report.
The highest value of electoral bonds sold was during the ninth phase from April 1-20, 2019 — Rs 2,256 crore worth of electoral bonds, the report said. The second highest worth Rs 1,365 crore was during the eighth round between March 1 and 15, 2019.
Both the eighth and ninth tranches had the longest windows of 15 and 20 days, respectively, said the IndiaSpend report.
Electoral bonds are available in denominations of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore.
Until October 2019, a total of 12,313 electoral bonds of various denominations were sold, the report said, with as many as 5,624 bonds sold in the highest value denomination of Rs 1 crore.
About 4,877 bonds were sold in the next highest denomination of Rs 10 lakh.
Region-wise, the SBI's Mumbai branch witnessed the highest sales, worth Rs 1,879.96 crore, as per the IndiaSpend report, followed by Kolkata (Rs 1,440.33 crore) and New Delhi at third with Rs 918.58 crore.
Interestingly, Hyderabad and Bhubaneshwar recorded the fourth and fifth highest value of electoral bond sales, the period overlapping with assembly elections in the state, the report said.
In terms of the number of bonds sold, Kolkata was top with 3,478, followed by Mumbai with 2,899, it added.
Of the Rs 6,129 crore worth of electoral bonds purchased, 99.67 percent (worth Rs 6,108 crore) were redeemed, the IndiaSpend report said. In terms of the number of bonds, 12,173 of 12,313 electoral bonds were redeemed, it added.
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).
New Delhi saw the largest share of electoral bonds redeemed: Nearly 80.5 percent of the total value (Rs 4,918) crore and 8,903 of 12,313 bonds were redeemed in the national capital, the IndiaSpend report said.
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, it added.