Political parties redeemed Rs 1,212-cr electoral bonds ahead of state polls

Political parties encashed electoral bonds worth Rs 1,212 crore in the run-up to the recent round of elections in five states, taking the total of such bonds redeemed to Rs 9,187 crore since 2018.

In the 19th tranche of sale of electoral bonds, State Bank of India (SBI) — the only authorised bank to issue such bonds — issued 2,068 electoral bonds through its 12 branches, Minister of State for Finance Pankaj Chaudhary informed the Lok Sabha.

About 12.13 billion electoral bonds were sold during the 19th issue of electoral bonds that started from January 1 to January 10 ahead of the elections in Uttar Pradesh, Uttarakhand, Punjab, Manipur, and Goa.

Electoral bonds can be purchased by a person who is a citizen of India or entities incorporated in India. Registered political parties that have secured not less than 1 per cent of the votes polled in the last election of Lok Sabha or Assembly are eligible to receive such bonds. Electoral bonds are not issued to foreign entities.

An electoral bond is valid for 15 days from the date of issue, and is issued in denominations of Rs 1,000, Rs 10,000, Rs 1 lakh, and Rs 1 crore.

Since inception or 2018, electoral bonds worth Rs 9,187 crore have been encashed by political parties. In 2021, electoral bonds worth Rs 1,502 crore were redeemed as compared to Rs 363 crore worth bonds redeemed in 2020. The highest redemption of electoral bonds was in 2019 — at Rs 5,062 crore — when the Lok Sabha elections took place. About 5,071 crore electoral bonds were sold in 2019.

Electoral bonds were introduced as an alternative to cash donations made to political parties in an effort to ‘cleanse the process of funding of political parties’ and make it more transparent. However, opposition parties have raised concerns about alleged opaqueness in funding through such bonds.