India Tracker analysis of electoral bond sale shows a sharp jump during elections

By: Yash Gupte

The sale of electoral bonds dropped to Rs 45.38 crore in July 2019 but later increased to Rs 231.93 in October 2019, just a month before the assembly elections in Maharashtra, Haryana and Jharkhand.

Just few weeks ahead of Gujarat and Himachal Pradesh polls, the Central government had made an amendment to the electoral bond scheme. The Ministry of Finance issued a notification for amending the scheme to provide an additional period of 15 days for the sale of electoral bonds in the year of general elections to the Legislative Assembly of States and Union Territories with Legislature. Many activists and opposition leaders had raised strong objections against the government’s decision of amending the electoral bond scheme as the model code of conduct was already in place for the Himachal Pradesh and Gujarat Assembly elections.

The policy has so far permitted the sale of electoral bonds for 10 days each in January, April, July, and October, with an additional 30 days permitted in the Lok Sabha election year. The amendment effectively adds 15 additional dates each year for the sale of the electoral bonds since Assembly elections are held in a number of states and union territories every year. The Ministry also said that the State Bank of India (SBI) has been authorised in the 23rd tranche of sale to issue and encash electoral bonds through its authorised branches.

As per the notification, the electoral bonds shall be valid for 15 calendar days from the date of issue and no payment shall be made to any payee political party if the bond is deposited after expiry of the validity period. The Electoral Bond deposited by an eligible political party in its account shall be credited on the same day.

Considering the amendment in the electoral bond scheme, India Tracker takes a look at the sale of electoral bonds from March 2018 to October 2022.

Source: Association for Democratic Reforms

The total number of electoral bonds sold from March 2018 to October 2022 was 19,520. Electoral bonds worth Rs 10,791.47 crore were sold during the period. An interesting observation from the above data shows that the sale of electoral bonds jumps exponentially during the election period in the country. January 2019 recorded a sale of electoral bonds worth Rs 350.36 crore. This figure jumped to Rs 1,366.69 crore in March 2019, one month before the Lok Sabha elections. The sale of electoral bonds further jumped to Rs 2,256.37 crore in April 2019 during the Lok Sabha elections. Along with the Lok Sabha elections, assembly elections were also held in the states of Andhra Pradesh, Arunachal Pradesh, Sikkim and Odisha. This shows that the political parties received maximum donations through electoral bonds during the elections.

The sale of electoral bonds dropped to Rs 45.38 crore in July 2019 but later increased to Rs 231.93 in October 2019, just a month before the assembly elections in Maharashtra, Haryana and Jharkhand. In a similar pattern, the sale of electoral bonds jumped from Rs 81.67 crore in January 2020 to Rs 282.29 crore in October 2020. The elections to the Legislative Assembly of Bihar were held in the last week of October and first week of November 2020. This again highlights that the sale of electoral bonds increases just before the elections.

Electoral bonds worth Rs 42.10 crore were sold in January 2021 but this figure increased to Rs 695.34 crore in April 2021 during the assembly elections in Assam, West Bengal, Kerala, Puducherry and Tamil Nadu. In 2022, January recorded the highest sale of electoral bonds worth Rs 1213.26 crore just before the Legislative Assembly elections in Goa, Manipur, Punjab, Uttar Pradesh and Uttarakhand.

Electoral bonds worth Rs 545.25 crore were sold in October 2022, a month before Legislative Assembly elections in Gujarat and Himachal Pradesh. The new window for the sale of electoral bonds opened by the central government has drawn a lot of criticism among the opposition and activists, questioning the transparency of the law.