Thursday, 25 Apr, 2024
Politics 20-Mar, 2024

Unpacking the Electoral Bond Trail: Crony Money Flows

By: Damini Mehta

Unpacking the Electoral Bond Trail: Crony Money Flows

Source: Getty

The SC ruling quashing the bonds and ordering the release of the data comes at a crucial time just a few weeks before the elections to the Lok Sabha. Whether the opposition will attempt to capture public attention with the electoral bond data depends on further revelations of the complete details linking specific donors to parties.

Since the launch of the electoral bond scheme in 2017, the Bharatiya Janata Party (BJP) has received more than 50% of the total bonds sold at Rs 7,721.40 crore. The Indian National Congress (INC) is a distant second recipient at Rs 1,810 crore followed closely by the Trinamool Congress at Rs 1,706.80 crore. The figures pertain to the data released by the State Bank of India (SBI), the sole authority to issue the now quashed electoral bonds, and published by the Election Commission of India (ECI) on the orders of the Supreme Court of India (SC). 

The data published so far fails to paint the complete picture as the donations prior to April 2019 are based on the data submitted by the political parties to the Supreme Court. Moreover, there is no clarity on the bond purchases made by different entities from January 2018 to 11th April 2019 as the same has not yet been published by the ECI. Lastly, there is no way to link the purchaser of a bond to the party it donated to, leaving questions about the party wise sources of these funds unanswered.

The BJP, under Prime Minister Narendra Modi, is vying for a third consecutive term in power at the center with a target of 400 plus seats. The last two general elections to the Lok Sabha (LS), in 2014 and 2019, witnessed the rise of BJP as the single largest party in the lower house and eventually the Rajya Sabha. The dominance of the party on the national political stage has left limited space for both the opposition as well as its coalition partners. In this scenario, transparency in funding for political parties becomes of utmost importance. Politico-corporate nexus is an illness plaguing democratic forms of government across the world right from the lobby system in the US to discreet fundings and rampant flow of black money in India and calls for a more transparent and open mechanism to fund elections. 

We take a look at the key revelations from the electoral bonds scheme data released by the SBI, how companies fare during these bond purchases and where this money went.

Election Money Come, Election Money Go

On 15th March 2024, the ECI made public the first set of data on electoral bonds purchased and encashed between 12th April 2019 and 15th February 2024. The first set of data on electoral bonds is currently present in the form of two different lists – bonds purchased by different entities from the SBI and bonds redeemed by different political parties over years – with no clear interlinkage between the two lists. On 18th March, the ECI published a second set of data as submitted to the SC after its interim order dated 12th April 2019. This data was submitted by the political parties to the Supreme Court and pertains to the bonds redeemed by different parties prior to April 2019. The purchaser of these bonds redeemed prior to April 2019 is still unknown.

The electoral bond scheme was launched in January 2018 but after several petitions challenging its constitutionality in the Supreme Court, the top court, in February 2024, declared the bond scheme unconstitutional. The scheme was launched to introduce an element of transparency in the political funding ecosystem of India and intended to curtail the use of black money. However, according to the SC ruling the scheme is “unconstitutional and manifestly arbitrary” and provides blanket anonymity to political donors, as well as critical legal amendments allowing rich corporations to make unlimited political donations.

The compiled data from the two sets shows that a total of Rs 15,529 crore worth of electoral bonds were purchased by different entities between January 2018, when the scheme was notified, to February 2024, when it was quashed by the SC. 

Who received how much?

The BJP has received nearly 50% of the total funds under the electoral bonds scheme. According to the Association of Democratic Reforms, the party received Rs 1,450.90 crore and Rs 210 crore in 2017-18 & 2018-19 respectively. When combined with Rs 6,060.50 crore raised during 12th April 2019 and 24th January 2024, it adds to Rs 7,721.40 crore or 50% of total amount so far of Rs 15,529 crore.

The principal opposition party Congress received Rs 383.30 crore and Rs 5 crore in the first two years of the scheme and in total received Rs 1,810 crore through electoral bonds, 11.65% of the total funds. The Trinamool Congress (TMC) emerged as the third largest recipient of electoral bond funds and redeemed Rs 97.30 crore between 2017 and 2019. Adding that to the amount revealed in the SBI data, the total for the party works out to Rs 1,706.80 crore or 11% of the total funds. Odisha’s ruling party Biju Janata Dal or BJD also received large sums through electoral bonds sitting at Rs 989 crore.


This analysis excludes data from 1st April 2019 to 11th April 2019 which has not been released by the SBI so far. The period pertains to a crucial time before the 2019 Lok Sabha elections and likely witnessed considerable cash flows.

Corporate Donors: Who paid?

The electoral bonds were a designated financial instrument allowing interested parties, individuals and corporate entities, to contribute funds to political parties discreetly as the bonds had no identification of the donor and the political party to which it was issued. With no way to ascertain who donated to whom, the data submitted by the SBI was expected to shed light on the source as well as destination of poll funding through the controversial scheme. However, the data submitted gives only half the story. 

The list details who purchased bonds when and in what denomination but lacks the essential identifier to link a bond with its final recipient thereby retaining the political veil on electoral funding. The below analysis pertains to the period between 12th April 2019 and 15th February 2024, for which a list of donors is available. 

There is a clear concentration of electoral funding to 10 or so top companies. More than a third of the total donations between April 2019 and February 2024 came from the top 10 donors buying bonds to the tune of Rs 4,200 crore, all top 10 being corporate donors. 

According to the SBI’s data, in this period, Future Gaming and Hotel Services emerged as the largest donor and bought electoral bonds equal to Rs 1,208 crore along with an additional Rs 160 crore purchased through two related entities. The next 40 donors on the list of top 50 donors contributed to 24.6 per cent donations accounting for Rs 2,989 crore that passed on to various political parties through the bond scheme.

Megha Engineering and Infrastructure Ltd, promoted by PP Reddy and PV Krishna Reddy, was the second largest donor and bought Rs 966 crore worth bonds. Qwik Supply Chain Pvt Ltd came in third place with Rs 410 crore in bond donations to political parties. 

Of the total of 1,320 donors, the remaining 1,270 donors accounted for less than the top 50 combined, donating Rs 4,967 crore or 40.9 per cent of the funds. 

Some of the biggest companies to use electoral bond schemes to donate money to their favored political parties were Anil Agarwal-promoted Vedanta Ltd, Sunil Mittal-promoted Bharti Airtel, AV Birla Group-promoted Essel Mining Ltd, Bajaj Auto Ltd and DLF Ltd. Owing to lack of data it cannot be ascertained exactly which political parties received these funds from each of these corporate houses. The Supreme Court has already ruled on a petition ordering SBI to disclose the full set of data right from the onset of the scheme including the alphanumeric codes for the bonds purchased and redeemed.

ED-IT Knocking, Money Goes to Polls

Of the five top donors that used electoral bonds to fund political parties, atleast three faced probes by central agencies such as the enforcement directorate (ED) and the Income Tax (IT) Department.

In early 2019, ED began a money laundering probe against Future Gaming, the largest user of electoral bonds and by July of 2019, had attached assets worth over Rs 250 crore. In April 2022, the central agency further attached movable assets worth Rs 409.92 crore in the case. Five days later, Future Gaming bought Rs 100 crore in electoral bonds.

Megha Engineering and Infrastructures Ltd (MEIL), the second largest donor through the bond scheme is engaged in key projects of the Telangana government such as the Kaleswaram Dam project. It is also building the Zojila tunnel and the Polavaram dam. In April 2019, MEIL purchased poll bonds worth Rs 50 crore and in October of the same year, the IT department raided the offices of the company following which a probe by the ED was also started. The BJP emerged as a key opposition to the ruling party at the time, TRS. 

In mid-2018 a case initiated by the ED against Vedanta Group, the fifth largest user of electoral bonds for poll funding, translated in 2022 into a Central Bureau of Investigation (CBI) case of corruption following which ED also began a money laundering probe. In April of 2019, Vedanta Ltd purchased bonds worth over Rs 39 crore. The company went on to purchase bonds totalling Rs 376 crore in the next few years. 

Another major company and among the top 15 donors, Jindal Steel and Power, has faced probes by Central agencies in the coal blocks allocation case. The ED raided the premises of the company and its promoter Navin Jindal in a fresh case of forex violation in April 2022. The Jindal family, starting with patriarch O P Jindal, has long standing ties with the Congress party in Haryana. Naveen’s mother Savitri Jindal has held multiple portfolios in the Congress government in Haryana between 2004 and 2014. 

Source: Getty | The incumbent BJP led by Prime Minister Modi is fighting for a third consecutive term in power at the center. 

Currently, speculations are rife about Naveen Jindal and wife Shalu Jindal’s move to the BJP to contest Lok Sabha elections from Kurukshetra. The company made its first tranche of electoral bond purchases in October 2022 and has donated a total of Rs 123 crores. To which party this money went remains to be seen.

In another case, a company led by former TDP MP CM Ramesh, Rithwik Projects Pvt Ltd was under the IT scanner in October 2018 over allegations of siphoning off funds to the tune of Rs 100 crore. The company purchased electoral bonds worth Rs 45 crore between April 2019 and February 2024.  Ramesg joined the BJP just a few months ago. Apart from the top three, there are several other companies who have purchased electoral bonds while being under the scanner of a central probing agency. 

With Electoral Bonds Gone, What Next before Lok Sabha 2024?

A thorough analysis of the electoral bond data released by the SBI reveals that the top 20 donors operate in sectors where resources are either scarce, controlled by the government or require government licenses and approvals ranging from sectors such as mining and metals to energy, construction and telecom. Clearly, there were considerable limitations to the Electoral Bond scheme. 

The Union BJP government defends the scheme calling it an effective mechanism to eliminate flow of black money in elections as the bonds could be purchased only through bank accounts and deposited also in bank accounts. The scheme hardly saw any individuals using the bonds to donate money to parties and in several cases there was a close link between awarding of contracts and central agency probes with the timing of bond purchases by corporates. 

Source: Getty | Opposition parties, including the Congress, led by Rahul Gandhi have called the Electoral Bond Scheme introduced by the BJP government in 2018 a scam and a blatant attempt at crony capitalism. 

The SC ruling quashing the bonds and ordering the release of the data comes at a crucial time just a few weeks before the elections to the Lok Sabha. The last two terms witnessed a shift in political power with the emergence of the incumbent BJP as the single largest party at the center. The BJP is facing considerable opposition from a united INDIA front but in several areas, the opposition alliance faces difficulties. The Congress, led by Rahul Gandhi along with the other opposition parties is nurturing a poll narrative against the BJP attacking the government for policies that have increased prices, reduced jobs and misused public money. Whether the opposition will attempt to capture public attention with the electoral bond data depends on further revelations of the complete details  linking specific donors to parties. However, given all the parties across the spectrum received funding through electoral bonds barring CPI, the move could well backfire on the opposition, several of whom are recipients of corporate donations.through the bond scheme.