UNRAVELING the Electoral Bond Scam: India’s Largest Financial Controversy

Rakesh Dudhat

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electoral bond

Introduction In what’s being called the biggest financial scandal in the history of independent India, the Electoral Bond Scheme has raised serious concerns about transparency and accountability in political funding.

what is electoral bonds ?

 Electoral Bonds were designed as a financial instrument for political donations, allowing companies to purchase ‘coupons’ from banks, which political parties could then redeem. A rule stipulated that unencashed bonds would result in the funds being transferred to the Prime Minister’s Relief Fund within 15 days, adding another layer to the complex nature of this financial mechanism.

The Genesis of the Scandal :

 Introduced in 2017 by BJP, the Electoral Bond Scheme was touted as a means to clean up political donations. However, critics argue that it became a tool for anonymous kickbacks, with the government accused of using it to collect funds from corporate entities in exchange for business favours.

The Mechanics of the Scheme:

Electoral Bonds allowed donors to anonymously contribute to political parties, with the identity of the benefactor and the beneficiary kept secret from the public. This lack of transparency has led to allegations of a “tenders and kickbacks” model, where business opportunities were allegedly exchanged for political donations.

The Supreme Court’s Intervention:

 After years of legal battles, the Supreme Court declared the scheme unconstitutional, citing concerns over corruption and the potential for money laundering. This landmark decision has opened the floodgates for revelations about the misuse of the scheme.

The Discrepancy in Distribution:

 A significant point of contention has been the discrepancy in the distribution of Electoral Bonds. Official data from the Election Commission of India (ECI) contradicts claims made by certain political figures, revealing that the total bonds issued were not ₹200 billion, but ₹127 billion, encashed between April 2019 and January 2024. Out of this, the Bharatiya Janata Party (BJP) received ₹60 billion, accounting for approximately 47.5% of the total. This starkly contrasts with the second-ranking Trinamool Congress, which received bonds worth ₹16 billion, or 12.6%.

The Political Parties’ Share The distribution of Electoral Bonds among various political parties is as follows:

  • BJP: ₹60 billion (47.5%)
  • Trinamool Congress: ₹16 billion (12.6%)
  • Congress: ₹14 billion (11.1%)
  • BRS: ₹12 billion
  • BJD: ₹7 billion
  • DMK: ₹6 billion
  • YSR: ₹3 billion
  • TDP: ₹2 billion
  • Shiv Sena: ₹1.5 billion
  • Other parties (RJD, AAP, JDS, SKM, NCP): ₹300 to ₹700 million each

The Justification Debate:

 When this electoral bond scheme was launched, there was a journalist who decided to investigate this in detail. And to test this, she bought two electoral bonds. This journalist was Poonam Agarwal. She went to the SBI’s Parliament Branch and on 5th April and 9th April 2018, she bought two electoral bonds.Both were priced at ₹1,000 each. She was working for the Quint Media Organisation at that time. You can check out the video she uploaded on her channel. The buyer’s name was not mentioned on the electoral bond. Neither did it mention any other detail about who bought it. Both bonds looked to be exactly the same.


 “There is no difference except the date. Written in red here. Here, it is written 5th April and here it is written 9th April. Apart from these two things, there is no difference between the bonds.” But when she sent one of the bonds for forensic testing, it was revealed that every bond has a secret Unique Alphanumeric Number.

This secret number was visible only under ultraviolet light. This was shocking because this fact revealed another lie by the Modi government. The government had been claiming that anyone buying the electoral bonds, would not be identified, their identity would be hidden. No one would know who bought this bond.

When Miss Agarwal proved this, the Finance Ministry had to openly acknowledge that there were secret unique numbers on the bonds. But they also claimed that this number was only a security feature. And that the donations would not be tracked through this number and the identity of the buyer could not be ascertained.

The then Finance Minister, the late Arun Jaitley, used this point as a defense in Parliament’s Debate. He reassured the opposition parties that they don’t need to worry, no one would find out the identity of the donor, or the source of the donations. He said that their government is so benevolent that they think of even the opposition while making laws.

 At the heart of the scandal is the allegation that political donations were used as a means to secure business contracts, paid for with taxpayers’ money, turning a legal practice into a fraudulent scheme. Comparisons are drawn to high-profile cases of financial fraud, emphasizing that the scale of a company or the number of employees does not justify illegal activities.

The Core of the Scandal:

Basically, what the government did is called extortion. This is why Congress politician Rahul Gandhi called PM Modi, Vasuli Bhai. [Someone who runs an extortion racket.] But the second possibility could be that the company had actually committed money laundering, it was involved in illegal activities, and the government found out about the money laundering, tax evasion, the company stealing public funds, but did not actually have an issue with it, as long as the company paid a part of the benefits to the party.

The government cannot award a contract for any public project to a company at will. While issuing Tender Notice, various criteria for eligibility are mentioned. The minimum level of experience of the company. The past performance of the company. Whether the company has the technical capability to properly complete the project. The state of the manufacturing facilities of the company. The financial position of the company. Only after evaluating all these, is a contract awarded to a company. To the candidate who can hand in the best quality of work. The candidate who will charge the appropriate price for it. They shouldn’t be overcharging while the tax money is being wrongfully utilised.

Now you will remember the tunnel collapse in Uttarakhand, 41 workers were trapped in it. Do you know which company was given the contract to build that tunnel? Navayuga Engineering Company Limited. Between 2019 and 2022, this company bought electoral bonds to the tune of ₹550 million, Let me tell you another story.

In December 2021, an under- construction flyover fell in Ahmedabad. This flyover was being built by the company Ranjit Buildcon. This was the third incident involving the same company. In the inquiry, it was found that this company had compromised on the quality of the concrete and construction. But did you know that this company was given multiple projects by Gujarat’s civic bodies.

Vadodara, Rajkot, Surat, Ahmedabad’s Gandhinagar metro rail project were awarded to it. These were the business opportunities but where is the kickback? According to the list, between January and July 2023, this company bought electoral bonds worth ₹90 million. Let’s see another example, Pune-based Company BG Shirke Construction Private Limited.

Between January 2023 and January 2024, it purchased electoral bonds for ₹1.18 billion. But one year before this, in June 2022, an FIR was registered against this company for causing de@th by negligence. Because at the housing project construction site of this company, 4 people d!ed in an elevator crash. Before this, in October 2018, there was another incident.

At the construction site of this company, 4 people lost their lives when they fell from the tower crane. You can see that a political party doesn’t care about your life. As long as they get their share. *Let them shout if they want to. They’ll shout till they get tired, and then they will forget.

Look at the company Megha Engineering. Between 2019 and 2023, It bought electoral bonds to the tune of ₹9.66 billion. Such a huge amount! Almost ₹10 billion! Why would a company want to donate so much money to a political party? Three more companies were associated with this. Western UP Power Transmission Company Limited, SEPC Power, and Evey Trans Private Limited.

If you add up all the electoral bonds they purchased, it is more than ₹12 billion. What did they get in return? In June 2019, Telangana’s Chief Minister Chandrashekhar Rao inaugurated the Kaleshwaram Multipurpose Irrigation Project. In February 2024, the CAG submitted a report which revealed that initially the estimated cost of this project was ₹810 billion.But now it costs more than ₹14.7 trillion. In another report, the CAG stated that Megha Engineering was paid ₹51.80 billion in excess for four packages. It included the supply and commissioning of pumps, motors, and equipment. CAG also stated that apart from Megha Engineering there were other contractors like L&T and Navayuga Engineering.

If we look at the combined amount for all of them these contractors had received at least ₹75 billion in extended undue benefits. The report also states that the government seemed to be in a hurry to hand out these projects. 17 different projects worth ₹250 billion were awarded before receiving the detailed project report.

Not only that, in October 2020, the National Green Tribunal raised red flags about this project. The NGT said that the environmental clearance given to this project was illegal. Since this was happening in Telangana, where the BRS party is in power, so Congress and BJP both said that this Bahubali project has become a cesspool of corruption but, here comes the plot twist. “The Zojila tunnel…” Here, BJP’s Nitin Gadkari is talking about the Zojila tunnel. It connects Srinagar and Leh. “This was approved by your government. In this tender, the company which won the contract, 5 entities had submitted their bids, This was awarded to a company in Hyderabad, Megha Engineering.

” Multiple companies bid for it. But in August 2020, a small company from Hyderabad got this contract worth ₹45 billion. Which company? Megha Engineering. Look at another project. Thane-Borivali Twin Tunnel. Mumbai’s MMRDA floated a tender for two packages to build this tunnel. In April 2023, Megha Engineering purchased electoral bonds worth ₹1.4 billion and in the next month, in May 2023, Megha Engineering was awarded this project worth ₹144 billion. This is the same company that was raided by the Income Tax Department in October 2019. But after that, the list clearly shows the billions of rupees of electoral bonds it bought between 2019 to 2024. And in this time period, one after another, projects were awarded to it.

Not only by the state government of Telangana, but also by Modi’s central government. In June 2023, according to this article, this company was given a project worth ₹5 billion by the Defence Ministry. Friends, everything that I have told you till now, is just the tip of the iceberg. Apart from this, there is a strange case of a company named Future Gaming.

A lottery company. When this company was being raided by central agencies, Finance Minister Nirmala Sitharaman was tweeting photos of her meeting with the Lottery King’s son. Apart from this, there are some cases where Beef Exporting Companies bought Electoral Bonds to give donations to the parties. This case should be a wake-up call for those people who vote for this party for their religious affiliation. Then there are cases of mining giants Vedanta, EMIL, GHCL, MSPL, and how they have been accused of bending environmental rules. There is a case of Qwik Supply Chain with the same directors as in Mukesh Ambani’s company, Reliance. Looking at the list, it is clear that this company bought electoral bonds worth more than its net profit.

The Media’s Role :

The role of the media has also come under scrutiny, with accusations of biased reporting and failure to fact-check statements made by political leaders. The dissemination of misinformation has contributed to the confusion and controversy surrounding the Electoral Bond Scheme.

Political Parties Taking the Lead In response to the call for transparency, ten political parties proactively disclosed their list of donors, including Samajwadi Party, Aam Aadmi Party, National Congress Party, JD(U), JD(S), DMK, AIADMK, JKNC, MGP from Goa, and SDF from Sikkim2. Additionally, four political parties—CPI, CPI-M, All-India Forward Bloc, and CPI-ML—chose not to accept electoral bonds on principle.

The Question of Scams The blog post can delve into the complexities of political funding and the fine line between legal donations and alleged scams. It can discuss the concerns raised about the potential misuse of the Electoral Bond Scheme for tax evasion and the alleged quid pro quo arrangements between political parties and corporations.   

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credits to Dhruv Rathi

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