The Supreme Court's decision last week declaring that the electoral bonds scheme is unconstitutional as it violates citizens' right to information and may lead to quid pro quo arrangements between political parties and donors has come as a cause for cheer for India's opposition parties. They believe they have the ammunition now to target the ruling Bharatiya Janata Party (BJP) on corruption and puncture Prime Minister Narendra Modi's "na khaunga na khaane dunga" poll plank. The opposition is also hoping that the top court's order to the State Bank of India (SBI), the authorised institution under the scheme, to reveal donors' identities will strengthen its charge against the BJP of indulging in crony capitalism and striking several quid pro quo deals with corporates. 

In 2014, the BJP, playing up corruption as a major issue, had banked on the 2G and CWG scams and the controversial land deals made by Sonia Gandhi's son-in-law Robert Vadra to attack the Congress-led UPA. This time around, the BJP hopes the action of the Enforcement Directorate (ED) in several cases involving opposition players will provide steam to its 'zero tolerance for corruption' plank and thus improve its poll prospects. 

The opposition's charge,  meanwhile, is that the BJP got an undue advantage during elections as it pocketed a majority of the funding through corporates. However, data shows this is not correct. According to the figures compiled by the Association for Democratic Reforms  (ADR) for 26 tranches of electoral bonds from March 2018 to April 2023, the BJP got half of a total of ₹ 12,979 crore donations, while the Congress and other regional parties netted the other half.

All Parties Raked In Moolah

The ADR data show that the BJP, the Congress, the Trinamool Congress (TMC), the Biju Janata Dal (BJD) and the Dravida Munnetra Kazhagam (DMK) are the top five parties that received funds through electoral bonds till April 2022. While three of these are part of the opposition I.N.D.I.A bloc, the BJD is a non-aligned player, part of neither the BJP-led National Democratic Alliance (NDA) nor the INDIA blocs. 

What's worth noting is that though the opposition has over the years vociferously criticised the electoral bonds scheme, audit reports released by the Election Commission of India (ECI) show that parties like the TMC, the Aam Aadmi Party (AAP), the Bharat Rashtra Samithi (BRS) and the DMK profited from electoral bonds in FY2023. Here are a few figures:

• The TMC got 99.4% of its total donations worth ₹ 327 crore from electoral bonds;
• Over 99% of the DMK's ₹ 186 crore worth of donations were in the form of electoral bonds too;
• In 2022-23, the AAP received ₹ 84 crore worth of donations, of which over half (Rs 45 crore), came through electoral bonds;
• Odisha Chief Minister Naveen Patnaik's BJD received 100% of its donations worth ₹ 152 crore via electoral bonds in the last financial year

Some Cold Calculations

As of January 2024, the sum total of donations received by parties since the inception of the scheme in March 2018 stood at ₹ 16,518 crore. In a way, that covered one period of one election cycle in the country, one Lok Sabha election in 2019 and some 30-odd Vidhan Sabha elections. That's a small share, given that the total expenditure in one Lok Sabha Election (2019) was estimated to be a whopping ₹ 55,000-60,000 crore, according to the Centre for Media Studies. Considering India has 543 Lok Sabha seats, this amounts to around ₹ 100 crore per seat on an average. It's a well-accepted fact now that parties and candidates usually spend way more than the ECI-mandated ceiling of ₹ 95 lakh for Lok Sabha polls.

Apart from this, in around 30 Vidhan Sabha elections in a cycle, one can easily assume that there is an expenditure of another ₹ 55,000-60,000 crore. There are 4,100-odd Vidhan Sabha seats in India spread across states, with two to three serious candidates vying for each seat, spending an average of ₹ 5 crore each. Thus, the expenditure for each Vidhan Sabha seat can be taken to be roughly ₹ 15 cr, which translates to a total expenditure of around ₹ 60,000 cr across Vidhan Sabha polls.

Now, compare this to the amount parties have disclosed as their expenditure in the 2019 elections. According to the ECI website, some 32 national and regional parties together spent ₹ 2,591 crore during the 2019 general elections, of which ₹ 2,004 crore-around 77.4%-was spent by seven national parties. This is not even 5% of the total amount spent during elections, as estimated by the Centre for Media Studies. 

Let's look at the amount spent by candidates. The ADR analysed the election expenditure of 538 MPs elected to Lok Sabha in 2019, and found that they spent ₹ 51 lakh on an average. However, roughly 63% of this was funded by their respective political parties. This means they spent on an average ₹ 20 lakh from their own pockets or other sources. The total amount of money spent by MPs then amounts to ₹ 100 crore. This, again, is a very insignificant amount. 

Cash Rules

What all this means is that cash is the main source of election funding in India. Electoral bonds (Rs. 12,979 cr) account for just 10% of the total amount-around ₹ 120,000 crore-spent by parties and candidates in one election cycle of five years. 

There is a high possibility that with electoral bonds gone now, the same amount will take the cash route back. Banning electoral bonds doesn't reduce the influence of black money on our electoral process. Electoral bonds helped companies that do not generate cash, such as the services industry, to participate in electoral funding through legal ('white') channels. That option is now closed for them. 

One of the arguments being made by petitioners and activists against electoral bonds is that the ban would stop the quid pro quo arrangement between parties and corporations. However, since the actual amount received through electoral bonds is negligible and cash rules the roost, that quid pro quo, if any, isn't likely to be impacted by this order. 

In conclusion, all parties benefited from the electoral bonds mechanism, the BJP the most as it is in power at the Centre and holds the reins either on its own or in alliances in 18 states. Parties like the BJD, the TMC, the DMK and the AAP, which are strong regionally, have also been major beneficiaries, but are now trying to milk the SC order on electoral bonds for political rhetoric. That may or may not work in their favour.