Electoral Bonds | The Data is Damning. Is India’s Democracy on Sale?

A cursory glance at the data reflects a pervasive decay of democratic ethics of the political party in power.

It is pertinent to highlight that the released data is shared only between April 2019 to January 2024. The data from March 2018 to March 2019 is missing here, when the sale of electoral bonds was over Rs 2500 crore.

(Photo: Arnica Kala/The Quint)

The Election Commission of India (ECI) uploaded on Thursday the data provided to it by the State Bank of India (SBI) on electoral bonds purchased and encashed since 2019 on its website, a day before the deadline ordered by the Supreme Court (SC).

The ECI uploaded two sets of data. One file contains a date-wise list of bond purchases by companies and the other one contains a date-wise list of deposits by political parties that encashed the bonds (see the MS Excel link here for accessing the data).

It is pertinent to highlight that the released data is from April 2019 to January 2024. The data from March 2018 to March 2019 is missing, when the sale of electoral bonds was over Rs 2500 crore. Who were the donors and purchasers of these? And why is this data publicly missing? This needs urgent clarification.   

Also, a point that most investigators are arguing now is that the State Bank of India hasn’t shared the unique identification number of the electoral bonds’ purchase data. This number, often referred to as the “matching code”, could have established a connection between the purchaser of the bond and the beneficiary (as shown in The Quint's video below). The court has now issued a notice to the SBI on its failure to share these numbers.

If all the Data Were Public, What Would be the Macro-evidence of the Scale of ‘Legalised Corruption’?

There are some key questions already emerging from the released data, which need an extensive investigation. The Supreme Court clearly observed earlier that the data of the political donations made through electoral bonds could determine the basis of quid pro quo arrangements between (donating) companies and the political parties who were benefitting.

The quid pro quo trends appear to be coming out now despite the limited information shared in the data. Remember, the BJP is the largest beneficiary of the scheme by a huge margin.

The Times of India reported the following:

“Future Gaming and Hotel Services PR donated Rs 1,368 crore between October 21, 2020 and January 9, 2024, all in denominations of Rs 1 crore.”

“On July 23, 2019, the ED attached assets worth Rs 120 crore in an alleged money laundering scam, where he was accused of inflating prize money and amassing property from unaccounted cash.”

The report also said that the Directorate of Enforcement had searched over 70 premises associated with the company. According to the released data, the company proceeded to buy electoral bonds, with its first purchase being listed on 21 October 2020. Join the dots.

In July 2022, election watchdog Association for Democratic Reforms (ADR) analysed the Contribution Reports of Electoral Trusts submitted to the Election Commission of India for FY 2020-21, and noted that Future Gaming and Hotel Services PR donated Rs 100 crore to the Prudent Electoral Trust, which has donated the highest amount to the BJP.

Similarly, Megha Engineering and Infrastructure (MEIL) is one of the top donors of electoral bonds, having donated Rs 980 crore. The CAG had recently pointed out large-scale irregularities in the Rs 38,000 crore Kaleshwaram Lift Irrigation Scheme saying it was unviable and would bleed Telangana. MEIL is the main contractor of the project. One can join the dots here as well.

Also, on 11 April 2023, Megha Engineering donated Rs 100 crore in electoral bonds, and within a month it got a Rs 14,400 crore contract from the BJP’s Maharashtra government. Though the SBI has hidden bond numbers from the shared information, some of the donors and parties match can be clearly guessed (see here). 

The details are striking and mind-numbing while assessing the decaying electoral state of ‘democracy’ in India. It reflects a pervasive decay of democratic ethics in the conduct of political parties, especially the party in power.  

The BJP has more than 46 per cent of its overall funding coming from electoral bonds purchased by private companies, which it otherwise favours in fiscal policy (offering the most generous tax cuts, sops), while clearly benefiting those (with the largest donations) in handing contracts and policy-favours.

Future Gaming and Hotel Services and Megha Engineering are only two cases, two of the clearest ones. More will emerge. See here for a more detailed mapping exercise done by CA Himank Singla between the volume of private company donations made by firms like Wonder Cement Limited, Serum Institute of India, Qwik Supply Chain Limited, Vedanta Limited, Arcelor Mittal Group etc, and the nature of benefits received from the political party in power (the incumbent BJP in most cases).  

One can barely imagine, if all the purchase data is made accessible since the year the scheme started, what would be the macro-evidence and reality of the scale of ‘legalised corruption’ observable in India’s political-funding scene, putting Indian electoral democracy on sale, driven by the calculus of a direct transaction between those in power and those in business.  

The SC’s Role and Judicial Intervention is More Critical Than Before 

For decades, India’s Supreme Court has been admired across the globe because of its ability to resist and stand up to executive power. Gautam Bhatia, in his recent book Unsealed Covers, however, has shown how the apex has pursued a practice of “judicial evasion” during the rule of the Modi Government. However, the decision of the Supreme Court on the electoral bonds scheme stands in stark contrast.

Nevertheless, how the Court looks more closely into the highlighted cases above, and in the evidence of quid pro quo taking place, may well go on to define and shape the future of India’s electoral democracy and party funding. 

One can only remain cautiously optimistic about what the court may do, given the permanence in decline seen in the operational and functional autonomy and integrity of public institutions, when the government of the day is allegedly guilty of ‘legalised corruption’, favouring private company donors for political and electoral gains. 

(Deepanshu Mohan is Professor of Economics and Director, Centre for New Economics Studies (CNES), at the Jindal School of Liberal Arts and Humanities, OP Jindal Global University. This is an opinion piece and the views expressed are the author's own. The Quint neither endorses nor is responsible for them.)