ELECTORAL BOND DATA

3. The Controversies

• The primary point of contention with electoral bonds is the anonymity they offer to donors.
• An amendment to the Finance Act 2017 exempts parties from disclosing donations received through these bonds.
• This means that voters are unaware of the source and extent of funding for political parties, undermining transparency.
• Transparency activists argue that the amendment infringes upon the citizen's 'Right to Know' and further reduces the accountability of the political class.
• While the citizens remain uninformed, the government can access donor details from the State Bank of India, rendering only the taxpayers unaware of the source of donations.

4. Importance of Unique Alphanumeric Numbers in Electoral Bonds

• The State Bank of India (SBI) has meticulously recorded every detail of 18,871 purchases and 20,421 encashments of electoral bonds between April 2019 and January 2024.
• However, the absence of unique alphanumeric numbers poses a significant challenge, as it limits the ability to attribute specific transactions to individual parties or entities.
• This limitation results in an estimation of the total amount of electoral bonds purchased by each company or individual, as well as the total amount encashed by political parties, without establishing the precise details of who paid whom and when.
• The disclosure of unique alphanumeric numbers is crucial due to the recent ruling by the apex court, which has deemed the entire electoral bond scheme as unconstitutional.
• It is imperative to match the substantial sum of ₹12,155.1 crore worth of electoral bonds purchased by corporate groups, companies, and individuals between April 2019 and January 2024 accurately with the ₹12,769.08 crore total worth of electoral bonds encashed by political parties during the same period.
• In essence, the public's right to know is paramount. Citizens should have access to information regarding which political party received how much contribution from whom and on which specific date(s).
• Without linking the purchasers of electoral bonds with the encashers through unique alphanumeric numbers, any further inquiry or investigation into these "unconstitutional" transactions would be significantly impeded.

• The recent disclosure revealing that the BJP accounted for more than 47% of the total amount of electoral bonds encashed has sparked controversy and raised questions about information fairness and transparency in political funding.
• While the Union Home Minister has tried to deflect attention by pointing out the amounts encashed by other Opposition parties, the issue goes beyond mere numbers.
• The total amounts encashed by various political parties, as shown in Table 1, do not provide substantial insights or serve as actionable evidence of corruption or malfeasance.
• To truly understand the potential for quid pro quo arrangements or unethical practices, a deeper analysis of granular details such as the amounts, dates of purchase and encashment, and the identities linked to each electoral bond transaction is necessary.
• However, the reluctance of the State Bank of India (SBI) to disclose the unique identification numbers of electoral bonds hinders such investigations.
• The ruling party's strategy appears to be aimed at stalling any meaningful investigation or legal action related to these transactions until the conclusion of the election campaign.
• This strategy takes advantage of the information asymmetry between the ruling party and other political entities.
• While the Union Government, as the owner of SBI, has access to the entire electoral bond database, other political parties and the electorate remain in the dark about detailed transactional information. This information imbalance unfairly benefits the ruling party during electoral processes.
• This situation echoes other instances of data suppression, such as the non-disclosure of politically sensitive data from the caste census conducted during Census 2011.
• The BJP's alleged utilization of such data for electoral advantage while denying access to the Opposition and citizens underscores the misuse of power through withholding public information and data.
• Addressing these concerns requires a commitment to transparency and fairness in political funding and information disclosure.
• Preventing the abuse of power through information asymmetry and data suppression is crucial to upholding democratic principles and ensuring a level playing field for all political actors and citizens.

6. Preliminary Analysis of Electoral Bond Data: Potential Malfeasance and Conflict of Interest

The recently disclosed data regarding electoral bond transactions from April 2019 to January 2024 raises serious concerns and warrants a preliminary analysis. The companies and corporate groups that have collectively purchased electoral bonds exceeding ₹100 crore and individuals whose bond purchases surpass ₹5 crore. Several key observations emerge from this analysis:

(a) A significant portion of electoral bonds has been purchased by companies and corporate groups currently under investigation by central agencies like the Enforcement Directorate (ED), Central Bureau of Investigation (CBI), and Income Tax (IT) Department. 19 such entities have collectively invested ₹4,787.3 crore, constituting over 39% of the total amount. This raises suspicion regarding the source and purpose of these substantial contributions.

(b) Noteworthy entities such as Future Gaming, Megha Engineering, M K Jalan group, Vedanta Group, and Haldia Energy Limited (Sanjiv Goenka Group). If a substantial portion of electoral bonds purchased by these entities under investigation is linked to the party in power, particularly the BJP, it could indicate serious conflict of interest issues and potential quid pro quo arrangements.

(c) The largest individual purchasers of electoral bonds are often heads of corporate groups or their employees. This suggests an attempt by corporate entities to obscure their identities by using individual frontmen or making multiple small donations. Such practices raise suspicions of bribery, money laundering, and other forms of quid pro quo, such as influencing project contracts or policy decisions in exchange for political donations.

As the ruling party and the primary beneficiary of electoral bond redemptions, the BJP faces significant scrutiny regarding these transactions. The Modi government's delays in disclosing data and withholding unique alphanumeric numbers of electoral bonds during election campaigns raise questions about accountability and transparency in political funding.

7. The Way Forward

Addressing the issues requires a collective effort from the government, judiciary, and civil society to ensure transparency and fairness in political funding. This will strengthen India's democratic processes and prevent potential misuse of political donations.