Disclosure of massive donations, heavily favouring BJP, has triggered a debate on the relevance of transparency, fairness, and honesty in politics.
On March 14, the Election Commission of India (ECI) published details of crores of rupees worth of political donations, confirming the immense financial advantage of Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) weeks out from the upcoming 2024 Lok Sabha election.
In an affidavit filed before the Supreme Court, the State Bank of India (SBI) stated that a total of 22,217 electoral bonds of varying denominations were purchased by donors between April 1, 2019, and February 15, 2024, out of which 22,030 bonds worth Rs.12,769.40 crore were redeemed by political parties. The SBI, the nation’s top lender that was in charge of the electoral bond issuance system, was ordered by the court to furnish the details of the electoral bonds to the ECI by March 12, or possibly face contempt charges.
Consequently, the top court had given the ECI time till 5 pm of March 15 to upload the data on its website, and the data released by the poll panel runs into hundreds of pages. The ECI released the details on “Disclosure of Electoral Bonds Submitted by SBI” in two parts—one listing the buyers and the other listing the beneficiary parties—on its website a day before the court-mandated deadline.
Electoral bonds have been a key method of political funding, allowing donors to give anonymously through certificates purchased from the SBI. But on February 15, a five-judge Constitution Bench had scrapped the Centre’s electoral bonds scheme that allowed anonymous political funding, calling it “unconstitutional”, saying it violated the right of voters to know who was financing parties. The court also struck down the amendments made to the Income Tax Act and the Representation of the People Act that made the donations anonymous.
Donors and beneficiaries
Data from March 14 showed that the BJP was far and away the single biggest recipient from April 2019 to January this year. The BJP had received slightly less than 48 per cent of all election bonds cashed by parties up to March 2023, amounting to around Rs.6,060 crore. The second biggest beneficiary was the Trinamool Congress, which received Rs.1,609.50 crore (12.6 per cent). The Congress, India’s main opposition party, had by contrast received around Rs.1,421 crore (11 per cent).
The Bharat Rashtra Samithi (BRS) received Rs.1,214 crore, while the Biju Janata Dal (BJD) got Rs.775 crore, followed by the Dravida Munnetra Kazhagam (DMK) at Rs.639 crore. The Aam Aadmi Party (AAP) got only Rs.66 crore and the All India Anna Dravida Munnetra Kazhagam (AIADMK) Rs.6.05 crore. The Communist parties were a notable absence from the list of beneficiaries.
Some of India’s top blue-chip companies figure on the list of those who bought bonds, including Rs.35 crore worth of bonds bought in the name of Indian magnate Lakshmi Niwas Mittal, the UK-based executive chairman of multinational steel manufacturer ArcelorMittal. Besides Lakshmi Niwas Mittal, individuals who donated through electoral bonds included Kiran Mazumdar Shaw, Varun Gupta, B.K. Goenka, Jainendra Shah, and one person going by only the first name of Monika.
Other donors include SpiceJet, IndiGo, Grasim Industries, Piramal Enterprises, Torrent Power, Bharti Airtel, DLF Commercial Developers, Vedanta Ltd, Apollo Tyres, Edelweiss, PVR, Keventer, Sula Wines, Welspun, Sun Pharma, Vardhman Textiles, Jindal Group, Phillips Carbon Black Limited, CEAT Tyres, Dr Reddy’s Laboratories, ITC, Kaypee Enterprises, Cipla, and Ultratech Cement. Ghaziabad-based Yashoda Super Speciality Hospital purchased 162 bonds, mostly of Rs.1 crore each. Bajaj Auto bought bonds worth Rs.18 crore, Bajaj Finance Rs.20 crore, three IndiGo firms Rs.36 crore, SpiceJet Rs.65 lakh, and Rahul Bhatia of IndiGo bought bonds worth Rs.20 crore. Mumbai-based Qwik Supply Chain Pvt Ltd bought bonds worth Rs.410 crore and Haldia Energy Rs.377 crore.
However, the biggest donor, according to the list released by the ECI, is a little-known lottery company called Future Gaming and Hotel Services (owned by “lottery king” Santiago Martin) with bonds worth Rs.1,368 crore, followed by Megha Engineering and Infrastructure Ltd at Rs.966 crore and Qwik Supply Chain at Rs.410 crore. Future Gaming was probed by the Enforcement Directorate in March 2022. Meanwhile, flagship companies of India’s two richest billionaires—Mukesh Ambani and Gautam Adani—did not feature in the list.
Kolkata emerged as the home of more corporate donors than any other city. Of the top 50 electoral bond donors, 16 were based out of the “City of Joy”. These Kolkata-based companies together bought electoral bonds worth Rs.1,925.8 crore between April 2019 and January 2024. The top buyer was Haldia Energy (Rs.377 crore). Hyderabad was second with 11 donors, followed by Mumbai with eight.
Qwik, a company purportedly with links to the Reliance group, although Reliance has denied it is a subsidiary, has raised eyebrows as it bought electoral bonds worth Rs.360 crore in the 2021-22 fiscal year, when its net profit was only Rs.21.72 crore. Also, Kiran Mazumdar Shaw of Biocon appears on the list in her individual capacity with about Rs.6 crore.
Donations made through electoral bonds by individuals or entities also carried a tax benefit. Under Sections 80GG and 80GGB of the Income Tax Act, 1961, they were eligible for 100 per cent tax exemption as long as the bonds had been redeemed by the parties.
Other parties that redeemed electoral bonds include the Shiv Sena, Telugu Desam Party (TDP), YSR Congress, Janata Dal (Secular), Nationalist Congress Party, Janata Dal (United), Rashtriya Janata Dal (RJD), Samajwadi Party, Jammu and Kashmir National Conference, Goa Forward Party, Maharashtrawadi Gomantak Party, Sikkim Krantikari Morcha, Jharkhand Mukti Morcha, Sikkim Democratic Front, and JanaSena Party (JSP).
The TDP and the JSP from Andhra Pradesh, part of the ruling NDA at the Centre, downplayed the issue of their names featuring in the list of parties that have encashed electoral bonds. JanaSena spokesperson Ajay Kumar said, “We have people who will give money to us also. And electoral bond was a legal thing.”
According to an earlier report by the Association of Democratic Reforms, electoral bonds worth Rs.16,518 crore have been sold from March 2018 to January 2024, which form more than half of all donations received by political parties. Critics said the scheme reduced transparency by leaving the public unable to scrutinise whether donors had received political favours. They also feared it gave the government the power to see who was funding opposition parties by accessing donor details through the state-owned SBI.
Political reactions
While most of the bonds have been issued in the name of political parties, the donations made to the Congress and the SP were made in the name of “President, All India Congress Committee” and “Adyaksha Samajwadi Party”.
Soon after the release of the data, the opposition Congress said there was a discrepancy in the numbers of entries in donor and recipient files—18,871 against 20,421. It also asked why the data shared pertained to a period from April 2019 even though the scheme for anonymous political funding was introduced in 2017. Congress general secretary Jairam Ramesh also said the party continues to demand unique bond ID numbers, so that it can precisely match donors to recipients. “Over 1,300 companies and individuals have donated electoral bonds, including over 6,000 crore to the BJP since 2019.”
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Ramesh told media outlets that the whole affair exposed the BJP’s “corrupt tactics”, claiming that there was a pattern to this extortion wherein several companies that were either raided or had won a contract purchased electoral bonds shortly thereafter. He also said the scheme lent itself to money laundering through shell companies as the scheme did not restrict any company to donating only a small percentage of its profits.
The Congress on March 14 alleged that the BJP has misused Central agencies like Enforcement Directorate (ED) and Central Bureau of Investigation (CBI) to garner Rs.400 crore through electoral bonds from 45 companies after raids on them and demanded that it should come out with a white paper on its finances if it cared about democracy.
Congress president Mallikarjun Kharge cited media reports saying fresh investigations have revealed that 15 more companies donated to the BJP after raids were conducted on them by central probe agencies. “Was it blackmail, extortion, loot, and coercion to get more donations? A fresh investigation shows 15 more companies donated to BJP after ED, CBI, Income Tax raids, making it a total of 45 companies paying BJP nearly Rs 400 crore,” Kharge alleged in a post on social media platform X.
Attacking the BJP-led Centre over the issue, Rajya Sabha MP Kapil Sibal said, “The person who started this scheme was our former Finance Minister [Arun Jaitley] and he thought that in this manner, no political party would be able to compete with us [BJP] and he was proven right. The one who has money can play the game.” Sibil said it has to be investigated which political party got how much donation.
Senior RJD leader Manoj Jha on March 15 alleged that the data on electoral bonds has proved that the ruling BJP at the Centre is “the most corrupt political party in the history” of the country. Jha, the party’s national spokesperson, also claimed that the data, which has been put up on the Supreme Court’s website, flies in the face of the “nationalistic pretensions” of the BJP, while lending credence to the charge that central investigating agencies were being misused for political ends.
The Rajya Sabha MP also pointed out that “a private company was raided by the ED and, a few days later, it ended up purchasing electoral bonds. Anybody can join the dots and make out what the so-called largest political party of the world has been up to.”
Meanwhile, Union Finance Minister Nirmala Sitharaman on March 15 said that huge “assumptions” have been made after the release of data and admitted that while the system might not be perfect, it was “one bit better” than the previous system of political funding that was “completely imperfect”.
“The electoral bond system may not be perfect. We must take lessons from the Supreme Court judgement on electoral bonds. There may or may not be a new law around this, I’m not commenting on it. Will make efforts to make sure there is transparency,” Sitharaman said while speaking at a media conclave.
Sitharaman also dismissed as “assumptions” the links between raids by central probe agencies on firms and their subsequent donations to election bonds. “I think you’ve based yourself on huge assumptions, that the money was given after the Enforcement Directorate raid happened,” Sitharaman said while responding to a question at the conclave.
The data released still does not map electoral bond buyers to recipients, leaving it unclear which individual and corporate donors were funding which parties. The Election Commission will announce the schedule for the upcoming Lok Sabha elections on March 16 at 3 pm. Modi and the BJP are strongly favoured by political observers to win a third term. Along with the BJP’s opinion polling lead and vastly larger campaign war chest, Modi remains widely popular with the public after a decade in power.
Supreme Court issues notice to SBI
The SBI is “duty bound” and has to disclose the unique alphanumeric numbers of the electoral bonds received by political parties, the Supreme Court said on March 15 while seeking a response from the bank for not doing so.
A five-judge bench headed by Chief Justice D.Y. Chandrachud said the apex court in its verdict on electoral bonds case had directed the disclosure of all the details of bonds, including the purchaser, amount and date of purchase. All details have to be furnished by the SBI, the CJI observed a day after the Election Commission put out the entire list of entities that have purchased electoral bonds for making political donations.The bench, also comprising Justices Sanjiv Khanna, B.R. Gavai, J.B. Pardiwala, and Manoj Misra, issued notice to the SBI and posted the matter for hearing on March 18.
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“Who is appearing for the SBI? Because in our judgment, we had directed disclosure specifically of all details of the bonds including the purchaser, the amount, and the date of purchase. They have not disclosed the bond numbers. That has to be disclosed by the SBI,” the CJI said, pulling up the bank. The unique alphanumeric numbers would match those who had purchased the electoral bonds to the parties they were donating to.
“They [SBI] have not disclosed the bond numbers. That has to be disclosed by the SBI,” the CJI said. “But really speaking, we can take exception to what they have disclosed because they were duty bound,” he added.
(with inputs from Ramesh Chakrapani, PTI, AFP, Bloomberg, and ANI)
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