The totalitarian project behind the electoral bonds scheme

Example 1: Ajay Mishra Teni, Union Minister of State for Home Affairs, is the BJP member of the Lok Sabha from the Kheri constituency in Uttar Pradesh. In October 2021, his son, Ashish Mishra Monu, allegedly drove into a crowd of protesting farmers in Lakhimpur Kheri, killing four farmers and a journalist. The junior Mishra is under trial for murder.

The government led by Prime Minister Narendra Modi resisted immense pressure to dismiss Teni from the Cabinet at the time and he has now been nominated by the BJP to contest the seat in the 2024 general election. “Teni Maharaj” is an archetype in Indian politics—the local strongman, whose family rules a virtual fiefdom, and who has made himself indispensable to the ruling party and the local administration. Teni apparently has no corporate backer, or entities who purchased electoral bonds before they were banned by the Supreme Court of India.

Example 2: Aurobindo Pharma is a leading manufacturer of pharmaceutical products with an annual turnover of around Rs.24,000 crore—90 per cent of its revenue comes from exports to around 150 countries. Between April 2021 and November 2023, the company, along with two of its subsidiaries with which it shares common directors, purchased electoral bonds worth Rs.77 crore, 77 per cent of which were given to the BJP, 19 per cent to the Bharat Rashtra Samithi (BRS), and the rest to the Telugu Desam Party..

Aurobindo Pharma, based in Telangana, also has a business selling liquor. On November 10, 2022, the company’s non-executive director, P. Sarath Chandra Reddy, is arrested in the Delhi liquor policy case. Five days later, his company purchases electoral bonds worth Rs.5 crore for the BJP. In June 2023, a court in Delhi allows him to turn approver and extends a pardon to him.  In November 2023, it donates (along with its subsidiaries) a further Rs.50 crore worth of electoral bonds to the BJP. The Aam Admi Party (AAP) led by Delhi Chief Minister Arvind Kejriwal, who is the first incumbent Chief Minister to have been arrested by the Directorate of Enforcement (ED) on the charge of money laundering, has alleged that Sarath Reddy’s pardon is a clear case of quid pro quo by the right-wing Hindu nationalist ruling regime.

Example 3: Of the total amount of more than Rs.12,154.51 crore worth of electoral bonds that were purchased since April 12, 2019, by buyers whose names have now been made public, the single largest buyer was Future Gaming and Hotel Services that purchased bonds worth Rs.1,368 crore between April 2019 and February 2024. The firm is controlled by Coimbatore-based Santiago Martin, who is often described as India’s “lottery king” and who has, for several years, been under the scanner of the Central Bureau of Investigation and the ED.

Martin’s company hedged its donations across the political spectrum—Rs.542 crore to the Trinamool Congress (TMC), Rs.503 crore to the Dravida Munnetra Kazhagam (DMK), Rs.50 crore to the Congress, Rs.154 crore to the Yuvajana Sramika Rythu Congress, Rs.100 crore to the BJP, and Rs.11 crore and Rs.5 crore respectively to the Sikkim Krantikari Morcha and the Sikkim Democratic Front; the firm has a flourishing paper lottery business in Sikkim.

The striking down of the electoral bonds scheme by the Supreme Court was no doubt a blow in favour of democracy and against Sangh Parivar’s totalitarian march.
The striking down of the electoral bonds scheme by the Supreme Court was no doubt a blow in favour of democracy and against Sangh Parivar’s totalitarian march. | Photo Credit: Illustration by Satish Acharya

Part of this information became known even before State Bank of India (SBI) disclosed the hidden alphanumeric code (unique serial numbers on electoral bonds visible only under ultra-violet rays) that enabled the buyers of bonds to be matched with the political parties that received/ redeemed the bonds in designated bank accounts with the SBI. How come?

The DMK itself disclosed to the Election Commission (EC) the names of donors of electoral bonds that were handed over in a sealed cover to the Supreme Court during the proceedings in court and subsequently made public after the verdict of the apex court on February 15. Besides the DMK, other parties (the All India Anna Dravida Munnetra Kazhagam, the Nationalist Congress Party, the AAP, the Samajwadi Party, the Janata Dal (Secular) and the Janata Dal (United)) also disclosed the donors. Notably, the four largest recipients of electoral bonds, the BJP, the Congress, the TMC, and the BRS, did not disclose the names of donors.

Example 4: The Pune-based Serum Institute of India Pvt Ltd controlled by the Poonawalla family is one of the world’s (and India’s) largest manufacturers of Covishield—the vaccine for COVID-19. Instead of purchasing electoral bonds, the company used the tax-free electoral trust route to contribute to the BJP: in three instalments in August 2022 (after the second wave of the pandemic had peaked), it contributed Rs.50.25 crore to the Prudent Electoral Trust (earlier known as the Satya Electoral Trust), which was promptly sent to the BJP.

A report by Reuters calculated that since 2013, the rupee equivalent of $272 million (or Rs.2,176 crore assuming an exchange rate of Rs.80 to $1) has come into different electoral trusts in the country, of which almost three-fourths went to the BJP. The Prudent Electoral Trust, quietly run by two chartered accountants in Delhi, includes among its donors some of the biggest names from India’s corporate sector: the Bharti Airtel group headed by Sunil Bharti Mittal; the Essar Group of the Ruias; the DLF (once Delhi Land and Finance) group led by Kushal Pal Singh, a large real estate conglomerate; the DCM (once Delhi Cloth Mills) Shriram group; the UPL (United Phosphorus Ltd) group, a significant manufacturer of chemical pesticides; an entity in the Kolkata-based RP-Sanjiv Goenka Group; and the Cadila group producing pharmaceuticals.


Political funding in India has many dimensions and facets, of which electoral bonds represent one. When former Finance Minister Arun Jaitley announced the electoral bonds scheme in his February 2017 Budget speech presenting the proposals for fiscal 2017-18, not many were convinced by his claim that the scheme would bring about greater transparency in the funding of political parties, campaigning for elections, and candidates seeking to be elected. The rules of the scheme took 11 months to make and were opposed by sections of bureaucrats within Jaitley’s own ministry, and by the Reserve Bank of India (RBI).

Now, despite the SBI’s dilly-dallying, the Supreme Court of India has forced the country’s biggest bank to disclose not only the names of those who purchased the bonds—over 18,871 of them—but the dates the bonds were purchased and the dates these unusual financial instruments were enchased/redeemed by political parties. That is how we know what we know today, even though bonds comprise only a fraction of the total political funding in the country, both legal and illegal.

A famous coinage terms India “semi-capitalist and semi-feudal.” Even the subservient EC speaks of the need to combat the abuse of “money power and muscle power” in elections. These phrases go some way towards capturing the dynamics of a political economy where, on the one hand, companies win tenders by paying—effectively—bribes to ruling parties through electoral bonds; and on the other, in a region, a political party and even the state itself can be subsumed into being elements of a feudal lord’s totalitarian rule.

Then there is the ideological project of the Sangh Parivar (or the family of organisations owing allegiance to the Rashtriya Swayamsevak Sangh), of which the BJP is the political arm. It aims to build a transformed Indian society, in which an authoritarian and totalitarian state oversees a unified, permanently mobilised, paranoid, militarised force of Hindus, constantly on the lookout for “threats” from “civilisational enemies”. This is what it terms the Hindu Rashtra—and achieving it requires changes both to laws and to social life.

The project of building a Hindu Rashtra certainly needs money and the support of all the strongmen scattered across the country—that is to say, it needs the support both of the semi-capitalist and the semi-feudal parts of society, both the money power and the muscle power. However, securing that money and support is not a goal in itself, nor is achieving power and securing it. These are all means to the end.

We start here to remind ourselves and our readers that we should not lose sight of the forest for the trees in our reading of the electoral bonds scandal and its place in India’s politics today. Electoral bonds, and political funding in general, are not just a means of simple corruption, or crony capitalism, or policy capture, or other similar perversions of democracy that can be corrected by the rule of law.

Violating the rule of law

One model of thinking about capital and the state is to seek to “follow the money” —the state must be acting out the interests of those who exert control over it by funding it. If they withdraw their funding, the regime will fall, the logic goes, and so the regime must act out their wishes.

This is the assumption that undergirds the “quid pro quo” part of the narrative around electoral bonds. So many companies have been found to have donated electoral bonds just before or after winning lucrative contracts. From the companies’ point of view, it can be termed the “cost of doing business,” another line-item in the balance sheet alongside taxes, duties, and other compliance costs.

Then there is the “monopoly of violence” model of thinking about the state—which is operative in the “extortion” part of the narrative. The regime can harass you out of existence, through its pliant police force, investigative agencies, and grindingly slow and often pliant judiciary. So, companies are forced to pay up, under threat of raids. This too is another “cost of doing business”—where the regime is running a protection racket. It is worth mentioning that this protection racket is often a part of a wholly criminal enterprise—where illegalities committed by businesses such as mining or real estate development, like expropriating people’s land, or laundering illegally obtained profits, are protected by the regime from legitimate law enforcement action.

Both these issues can, in theory, be addressed by the rule of law. Law enforcement agencies can investigate allegations of quid pro quos, prosecute wrongdoers, courts can issue punishments and quash illegitimately awarded contracts, and force the state to conduct fair tenders. Similarly, where there have been alleged donations in exchange for protection from enforcement action, wrongdoers can be investigated, prosecuted, and punished, and the enforcement actions in question re-examined for legitimacy, and, if legitimate, pursued to their legal end.

Another dynamic at play in the electoral bonds saga is plain tax avoidance—shell companies have been used to route corporate profits out of the profit-making companies’ books, leading to massive political donations being made by tiny companies, many obviously benaami entities with no discernible business. This too is an issue that the rule of law in India is equipped to deal with, provided the political will exists to do so.

“It needs to be pointed out that the striking down of the electoral bonds scheme, the exposure of who donated how much, and the possible legal consequences, are altogether still a meagre rear-guard action, insufficient to the cause of transparency in political funding.”

There is no doubt that these issues do in fact need to be investigated. That would be the natural course in a functioning system of law enforcement, and there is also a political reason for it. While opposition parties have been aiming jibes and accusations at the BJP, no complaints have been lodged yet, no investigations initiated, even in the eight States where parties of the opposition alliance are in power. A part of the reason these parties were dethroned in 2014 was the widespread perception that they are corrupt, unwilling to enforce the rule of law, and seeking to benefit by abusing their power.

On full transparency in political finance

It needs to be pointed out, however, that the striking down of the electoral bonds scheme for anonymous, secret, and unlimited political donations, the exposure of who donated how much to whom through this scheme, and the possible legal consequences that may follow, are altogether still a meagre rear-guard action, insufficient to the cause of transparency in political funding.

Where transparency in political funding is concerned, first, political funding is not just through electoral bonds. The BJP got only about half its funds through the bonds since they were introduced, the Congress about 60 per cent. Many parties did not get any funds through electoral bonds but have raised money through other forms of donations.

The pre-existing channels of political funding still exist and will now return to the fore with the bonds scheme struck down. Following the Supreme Court’s verdict, companies must once again be profit-making to donate to political parties, can only donate up to 7.5 per cent of their average profits over three years, and must disclose how much they donated to which parties in their balance sheets. However, we can anticipate that this will lead to a return of larger scale, untraceable donations in cash and through benaamdars. There is no transparent scheme of electoral funding on the horizon, and international experience demonstrates that full transparency remains elusive even in the best systems, as capital continues to find ways to mask its political influence and backing of parties. That is notwithstanding the fact that the “black” economy in India is all pervasive, and a massive donor to politics, as a part of the extortion racket model of political finance.

Measures like bringing political parties under the Right to Information (RTI) Act (which is opposed by most of India’s parties) or creating a system of public funding (which has remained an unimplemented proposal since the mid-1960s) will no doubt be massive gains for transparency. However, these kinds of “supply-side” measures will not be sufficient while structural issues on the “demand-side” remain—that is, how political parties spend the donations they receive.

India’s elections are among the most expensive in the world and this is an irreversible trend. India’s political parties spend massive amounts on just running themselves—it is worth remembering that India’s largest political parties are also among the largest such organisations in the world—and then on election campaigning. But an under-discussed aspect of their spending is in the form of handouts in cash and kind to voters during elections. These handouts are a feature of Indian elections that commentators of all stripes abhor, but they are not going away. Massive inequality and continuing widespread poverty mean that handouts during elections are meaningful devices to get votes and mobilise voters, which no amount of criminalising will legislate out of existence. Transparency in political finance requires transparency on both sides—fund-raising and expenditure. These structural features are barriers to transparency at both ends.

Transparency as a lens and a goal, however laudable, is not a political principle in itself. It cannot be disconnected from the ideological. This is where it is necessary to return to the larger political project within which the electoral bonds scheme was implemented.

Another step towards totalitarian authoritarianism

Several activists, such as Commodore Lokesh Batra (retired) used the RTI Act to bring out facts and records about electoral bonds. The response to an RTI application by Venkatesh Nayak of Commonwealth Human Rights Initiative shows that no donor sought a secret instrument by which to donate to political parties—that is to say, it was an innovation brought in by the ruling party of its own accord. The government put it in place over the objections of the EC and the RBI too, as the records show. This then compels the question of why the BJP thought the scheme was necessary. It is worth remembering that when the government brought in the electoral bonds scheme, the BJP was already far outstripping the other parties in donations: so what was the need for the scheme?

The answer to this question lies in the form of society and polity that the Sangh Parivar’s wider project seeks to create. That society features a totalitarian and authoritarian state, with a permanently mobilised para-state, primed to the over-riding priorities of its ideological project. This system oversees every individual’s life, in as granular detail as it is able to, and it relies on people to act as its enforcers, whether out of belief or fear. Virtually no personal choice remains in that society, every person’s life and mission is to serve the national project. That state brooks no form of independent motivation in any institution or individual in the public sphere (including anyone who might donate funds) that does not adhere to its political project and priorities. It is inconceivable for any committed individual, association, or company, to not contribute to the national project, whether monetarily or otherwise—it is everyone’s civic and national duty.

The features of the electoral bonds scheme—no limits on donations and no disclosure requirements—were shaped by the trajectory the BJP is walking on, from the current democratic republic to the under-construction totalitarian state system in which there is no need for the public to know who donated how much and to whom. Neither is there a need to limit donations to the profitability of the companies donating. This is because both these conditions would stem from a concern of undue influence exerted by a donor over a ruling party’s policies. In the totalitarian state, this question does not arise because the regime’s political priority and its policies are ideologically predetermined. The possibility of corporate donors distorting or capturing its policy priorities is no longer coherent, neither is the notion of public oversight over corporate funding of the regime to ensure accountability.

It is this vision that the electoral bonds scheme served. The BJP is faced with the challenge of transforming the cacophonous, inconsistent, and vastly diverse Indian political system, public sphere, and civil society into one that is coerced into complete surrender to its totalitarian vision. One easily executed part of this transformation was to change the system of political funding to serve its project rather than any democratic end.


Political funding in India has many dimensions and facets, of which electoral bonds represent one.    

Companies win tenders by paying bribes to ruling parties through electoral bonds, while in some regions, a political party and even the state itself can be subsumed into a feudal lord’s totalitarian rule.    

The electoral bonds scheme served the ideological project of the Sangh Parivar to build a Hindu Rashtra, which brooks no independent motivation that does not adhere to its political project and priorities. 

If such a change in India’s institutions and public sphere seems implausible, it should be emphasised that it is already under way, and far smaller political forces around the world than the Sangh Parivar have been able to coerce their countries’ populations into living in comparable systems in recent times, with some such existing to this day.

Any analysis of policy changes made by the BJP while in power needs to take this fundamental orientation of its political project into account. Its goals are far broader, and longer term in scope, than cornering funds for itself through handing out favours to corporates for bribes, or extorting from them through threats. Such analysis is effectively a distraction from understanding what the BJP’s project is trying to achieve.

The striking down of the electoral bonds scheme by the Supreme Court was no doubt a blow in favour of democracy and against this totalitarian march. It was a shot across the bow by that part of the Indian polis which has not yet been completely corralled into the Sangh Parivar’s project, where democratic aspirations as set out in the Constitution are used to evaluate policies. However, the liberal and democratic aspirations that it takes for granted, as principles by which to judge a government policy, mislead the political battle against totalitarianism. Those aspirations assume that corruption and deceit are disqualifying—as they are in democracy. However, in ideological totalitarianism, the only thing that disqualifies the regime is when it oversteps its bounds of intrusive control of people’s lives.

The Sangh Parivar’s politics entail a vice-like grip on every facet of everyone’s life, to its own ends, and nobody will have any say on its goals and priorities, and no right to know how it is functioning, including how it is raising money. Beyond corruption, quid pro quos, and extortion, this is the true story of the electoral bonds scheme.