The problem is, despite knowing the buyer's name, one cannot assume that the same entity gave the bond to a particular political party.
Representational image. (iStock)
Today, the whole of India (or most of the country) and part of the world will discuss and debate, rave and rant, and shout and scream about electoral bonds. Which business groups donated the most, and how much money did each political party receive?
As was the case over the past few weeks, the core issue will be lost in the ensuing controversies and counter controversies, rhetoric and logic, and facts and falsehoods. The details uploaded by the Election Commission on its website are meaningless. The whole exercise is pointless.
One can explore several reasons to justify this contrarian, seemingly foolish claim, but let us delve into the two most important ones. The first is that the amount received through electoral bonds since 2019 is minuscule or irrelevant compared to the actual amounts spent by candidates during the national elections.
The second is that there is currently no way to match the buyer (company) and receiver (political party) of these bonds. Even if this data is made public in the future—it has not been revealed so far—it will still prove futile.
If one talks to MPs or those who fought Lok Sabha elections in the recent past, one gets a sense of how much money is involved. Depending on whether a politician wishes to understate the amount or exaggerate it for different reasons, the estimates range between ₹20 crore and ₹100 crore per candidate.
Most MPs and ex-MPs admit that contrary to popular belief, sometimes it is more expensive to fight in rural constituencies compared to urban ones. This can also be true for constituencies with lower numbers of voters.
Based on an estimated ₹20 crore per candidate per constituency and a hypothesis that at least two candidates tussle on equal terms in each constituency, the budget to fight national elections comes to more than ₹20,000 crore. If the election costs are ₹100 crore per candidate per constituency, the total amount spent on national elections zooms to more than ₹100,000 crore.
Data crunched by media houses, albeit in a hurry as the figures were uploaded last night, indicate that the political parties mopped up between ₹11,000-₹12,000 crore through electoral bonds between April 2019 and January 2024.
Media calculations of the total raised through electoral bonds indicate that the BJP received ₹6,000 crore. This would be more than half the amount the party requires to fight the national elections based on the ₹20-crore estimate.
One can assume that the bonds replaced cash in elections and inculcated transparency. Now, we know the names of the donors and recipients, even though we cannot match which donor gave how much to which political party.
But this impression is a mirage. The consensus seems that the BJP cashed only a third of the ₹6,000 crore it received in April-May 2019 or during the last national elections. This translates into an average of ₹4 crore per candidate per constituency spent during the national elections, or much lower than the ₹20-crore estimate.
MPs and ex-MPs contend that they directly receive 20-40 percent of the money they spend from their political parties. The percentage depends on the clout of the candidates within their respective parties. If this is true, and one correlates the amount cashed by the BJP during the 2019 elections with estimates of actual expenditure, one arrives at a figure of ₹20 crore per candidate.
If an average of ₹4 crore was raised through bonds, comprising 20 percent of the actual expenditure, the total comes to ₹20 crore. Only if Rs 4 crore average comprises 40 per cent of total expenses will the overall figure come to Rs 10 crore. MPs and ex-MPs say that Rs 10 crore is an unrealistic figure.
We can now look at the second point – matching the donor with the recipient. A note prepared by the Association for Democratic Reforms (ADR), which filed the petition that led to a brouhaha over electoral bonds, explains that an electoral bond is issued in the “nature of a promissory note, which shall be bearer in character”. It says, “A bearer instrument is one which does not carry the buyer’s or payer’s name, no ownership information is recorded, and the instrument holder (political party in this case) is presumed to be its owner.”
Let us understand the implications. An electoral bond can behave like a currency note. Like a note can exchange several hands, so can an electoral bond. Since the buyer’s name is missing in both, a bond is as anonymous as a note. A bank can note down the serial number of a currency note when it doles it out to a customer and match it with the person who deposits it back. Similarly, SBI, which issues electoral bonds, can do the same: match the bond number purchased by a company with the one cashed by a political party.
But in neither case can one disprove that the note or bond has not exchanged hands. A can buy a bond and pass it on to B, who passes it on to C, who further gives it to D. Finally, entity K may give the bond to a political party. One cannot prevent this form of exchange. In effect, despite knowing the buyer’s name, one cannot assume that the same entity gave the bond to a particular political party.
The cycle of a bond is akin to what naturally and logically happens with a currency note, which is expected to change several hands before it is deposited back in a bank and later finds its way back into the market. Unlike a note, whose life is endless until it is damaged or taken out of circulation by the RBI, the life of an electoral bond has an inevitable end. The bond needs to be cashed.
In the current scenario, based on the uploaded data, there is no way to match the donor and recipient of an electoral bond. One only knows that X purchased a bond worth Y. And, on a particular day, political party A cashed a bond. But we do not know if X’s bond was cashed by A. We have no idea about it. Only SBI knows since it can match the bond number of the purchaser (donor) with the one cashed by a political party. This implies that the government knows it, too.
(The writer is an independent investigative journalist and author of several books. Views are personal.)
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