Electoral bonds: A lucrative secret investment?

Now a political party can even get funds moving from international tax havens into their coffers. All of it unaccounted money and all of it now moving through bank channels

A sample electoral bond
A sample electoral bond

Nitin Sethi

Years of reporting on corruption and crony capitalism in India had taught me one thing. The episodes we catch and write upon are mere symptoms. The disease that infects governance in India is our corrupted electoral funding.

When a business or a corporate entity invests in a politician or a political party, they see it as an investment. If the investment pays off—when the politician or the political party ascends positions of power—their expectations are straightforward. They expect a healthy return on the investment.

It is a high-risk investment (imagine, if their candidate or the party loses badly and their rivals come into positions of power), so the returns expected are also high. How do the winning candidates pay back the favour?

At the petty end are contracts that go to the donor, their friends and allies. At the higher end, the politician lobbies and the political party begins to make policies, laws, regulations, rules and executive orders that deliver undue business and profits to the corporates.

If the political outfit or politician has learnt to work the system, no rule or regulation is broken. It’s bent just enough to favour a donor. It is justified on files in bureaucratic language which citizens most often do not get access to and if they do, are unable to decipher.

Public interest ends up contesting and losing to more powerful and hidden corporate interests. Voting citizens lose to artificial entities whose only purpose of existence is to make profits for its shareholders and owners.

Petty corruption gets caught more often, because there is a paper or money trail at times to follow. Large-scale corruption, called crony capitalism, does not. At times it even gets celebrated as governments favouring ‘national champions’ among corporates.

So, when in 2019 the indefatigable transparency activist Commodore Lokesh Batra (ret’d) handed over to me more than 700 pages of internal government documents on electoral bonds, I knew we were on to something far more critical than anything I had reported in nearly 20 years of my career.

In those documents lay the machinations behind the new corrupt electoral funding method that the Narendra Modi-led BJP government had institutionalised and legalised in 2018.


India’s election and political party funding has always been corrupt. Unaccounted cash has flowed like blood in the veins of Indian electoral campaigns. It is not the only factor in winning an election but the case of a middling or poor independent candidate (or one from a poorer party) is so rare that we celebrate it like a miracle.

But, till electoral bonds became a reality, the use of unaccounted money in politics was illegal. At least on paper. The introduction of electoral bonds legalised it. I reported how this had been achieved. You can read it all at The Reporters’ Collective website:


To sum up the investigation: Any corporate or individual could now hand over any amount of unaccounted money secretly to a political party. Only the government in power could come to know who donated money to which political party.

Even an Indian subsidiary of a foreign company, which had never carried out any legitimate business, could secretly funnel hundreds of crores to a political party. The political party did not have to disclose who they got the money from.

The corporate which did donate could hide it in its balance sheets and accounts (even there, they did not have to say who they gave the money to). With more than two million registered corporates in India, it would remain impossible to trace the money.

The bonds were fashioned by the Union government in a way that the money could secretly pass several hands to reach the ultimate beneficiary political party, creating more layers of opaqueness.

So a political party could even get funds moving from international tax havens into their coffers. All of it unaccounted money and all of it now moving through bank channels. In effect, electoral bonds can now ensure black money is white-washed into the accounts of a political party for the latter to spend as if it was clean and honest money. And this insidious routing of money now had a legal cover.   

We at The Reporters Collective have continued to doggedly pursue the electoral bonds scam over the years. Some other journalists continue to report on information that comes out to them.

What we have shown: As expected, most of the money from electoral bonds has gone to the party in power, the BJP. You can read on it here: https://www.reporters-collective.in/projects/only-17-parties-in-supreme-courts-sealed-list-of-105-got-electoral-bonds-bjp-cornered-68-of-money

Commodore Batra continues to bring out information to show that the bonds are not used by average citizens but by those wanting to donate in crores. More than Rs 11,000 crore has been paid secretly into accounts of political parties so far.

We and others have proven that often the government has even bent and broken the rules in the past to help political parties garner still more money under the scheme.

The Supreme Court has sat quietly on the case pertaining to electoral bonds for years. The Collective recently leaked data on the bonds provided to the apex court by the government in a sealed envelope. But it’s not woken up the honourable justices.

I infer from my experience of reporting on electoral politics and corruption that the money flowing through electoral bonds is still not proportionately higher than the cash that oils Indian elections.

So, why is it such a big deal then, you may ask? Because this is unaccounted and secretive money that political parties (and predominantly the BJP) now get to spend as ‘white’ or legitimate income through banks—to pay off wherever they can only pay through banks—coming out looking very clean when it is in fact funded by dubious and secretive corporates and individuals.

For example, social media platforms such as Facebook would need to be paid through bank accounts to influence Indian citizens using political advertisement.

Potentially, a political party could now source black and untaxed money from dubious corporate friends in India and abroad through electoral bonds and pay it through its bank account to Facebook or other social media platforms.

Our political and electoral funding was always in the dark zone. With electoral bonds, the current government has put in a black hole.

Until citizens are able to shine a light on who funds our politicians, we will never be able to keep them accountable and ensure that they work for public purpose and not private profits.

(NITIN SETHI is a member of The Reporters Collective, which carries out deep-dive and investigative journalism)

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