Sikkim Elections: Amid Electoral Bonds Saga, Why BJP Snapped Ties With Ally SKM

Earlier this week, when much of the attention was still on the revelations from the controversial electoral bonds data, the tiny Himalayan state of Sikkim saw a major political development.

On 23 March, the Bharatiya Janata Party (BJP) broke off its alliance with the ruling Sikkim Krantikari Morcha (SKM) – and announced that the party will contest alone in the simultaneous Lok Sabha and Assembly elections in the state to be held during the first phase on 19 April.

The announcement came just days after it was revealed that the SKM was one of the only two political parties (former chief minister Pawan Chamling-led Sikkim Democratic Front or SDF being the other) in the entire Northeast to have encashed electoral bonds.

What's more damning is that the SKM, which rules over a population of less than 7 lakh, earned more than some of the national parties, including the Nationalist Congress Party (NCP) and the Samajwadi Party.

As other regional parties accuse the SKM of indulging in corrupt practices, why did the BJP – which itself is the single largest beneficiary of electoral bonds – end the alliance?

What Electoral Bonds Data Revealed

In the 2019 Assembly elections, the SKM upended the SDF's 25-year rule in the state to come to power. According to the electoral bonds data shared by the Election Commission of India (ECI), the SKM and the SDF are the only recipients of electoral bonds in the entire Northeast.

The SDF received Rs 5.5 crore via electoral bonds between April 2019 and February 2024. Before 2019, the SDF received another Rs 50 lakh through bonds from Alembic Pharmaceuticals Ltd.

The SKM, on the other hand, received Rs 36.5 crore through bonds, which it encashed between 13 October 2022 and 19 January 2024.

According to the data, the party raised about half of its total electoral bond sales just 10 days after Sikkim was hit by the worst flood in recent history. On 16-17 October 2023, even as a large part of Sikkim remained cut off due to the deluge, the SKM raised Rs 18 crore in total.

And which companies were the biggest donors for the ruling party in Sikkim?

• Future Gaming and Hotel Services

• Torrent Pharma

• IPCA Labs

In the wake of the electoral bonds data revelations, a political slugfest has ensued in the state with parties accusing both the SKM and the SDF of corruption. Albert Gurung, spokesperson of Sikkim's Citizen Action Party (CAP), alleged to The Quint,

"What one needs to pay attention to is that a party (SKM) ruling over a population of less than 7 lakh has managed to encash more than established national parties such as the NCP, the Samajwadi Party, among others. The question is why were firms donating so much to the party unless it was in return of some favours."

Against the SKM's Rs 36.4 crore, the NCP received Rs 30.50 crore, the Jana Sena Party Rs 21 crore, and the Samajwadi Party Rs 14.10 crore (as per the ECI data) through electoral bonds.

Gurung further alleged that the presence of Future Gaming and Hotel Services, which is the top purchaser of these bonds, is the reason behind why only two Sikkimese parties are involved.

"Future Gaming and Hotel Services have been directly involved in Sikkim lotteries under contract. It is a well-known fact that between 2008 and 2010, the Sikkim government incurred a loss to the tune of Rs 4,500 crore due to Future Gaming and Hotel Services. Even during the deluge in October last year, the firm contributed Rs 1 crore to the Chief Minister’s Relief Fund, indicating ongoing direct involvement with the state government."

Gurung further alleged that the bonds that the SKM encashed during the floods in October 2023 were "used for other purposes than providing relief and compensation to the people affected by it".

Jacob Khaling Rai, a spokesperson for the SKM, however, dismissed allegations of corruption levelled against the party.

"We have not misappropriated funds meant for flood relief as has been claimed by some parties. People affected by it have been compensated. We are transparent on where our funds come from. Nothing is opaque," he told The Quint.

But Did Electoral Bonds Play a Role in the SKM-BJP Split?

Political analyst and columnist Jiwan Rai told The Quint the revelations about the electoral bonds have put both the BJP and the SKM "in a tight spot".

"The data released by the Election Commission reveals that BJP is the biggest beneficiary of the electoral bond scheme which has already put the party in a sort of a tight spot. Further, the fact that the SKM (who the saffron party is in an alliance with) earned more than many national and regional parties made it even worst," he said.

In the 2019 Assembly elections, the SKM and the BJP had contested separately. The SKM won 17 seats and formed the government. On the other hand, the BJP had failed to win any seat.

However, the two parties stitched a post-poll tie after the BJP's tally of MLAs suddenly went up to 10 as SDF MLAs defected to the saffron party. Two SDF MLAs also joined the SKM, taking its tally to 19.

According to a source in the SKM, the two parties had met in January over seat-sharing for the upcoming Assembly elections, but "nothing solid came out in those meetings". The source added, "The talks of an alliance between the two parties hit a dead-end as our party's chief Prem Singh Tamang was opposed to stitching a pre-poll alliance with the saffron party."

The recent announcement about ending the alliance by Sikkim BJP state president DR Thapa was made after his meeting with the saffron party's central leadership in Delhi earlier this month.

The Sikkim BJP unit, however, dismissed claims about the electoral bond saga being behind the decision to call off alliance. BJP Sikkim Spokesperson Passang Sherpa told The Quint that the SKM was "running a corrupt administration by various means such as selling of natural resources and assets like hydel power projects at throwaway prices".

In February 2023, the Sikkim Cabinet divested the entire 60.08 percent stake of Chungthang-based mega hydel power project Teesta Urja dam (that was washed away in the floods last year) to Greenko Energies, a Mauritian private company. Sherpa alleged a lack of transparency in the deal. Even the SDF has claimed that the "disinvestment process was not conducted correctly."

"There was no mention of the benefit the Sikkim government will achieve after the move. The absence of clarity regarding the monetary receivable share by the government indicates that the decision may have been made without due consideration of the state government's interests and the broader public interest. This lack of transparency raises concerns about potential favouritism towards the firm," he said.

The SKM spokesperson dismissed these allegations, however he declined to comment on the disinvestment of the Teesta Urja dam.

Analyst Jiwan Rai said,

"Over the years, there have been allegations of corruption against the SKM. In fact, in 2017, the current chief minister Prem Singh Tamang was sentenced to jail for a year by a court in a corruption case in the 1990s when he was a minister in the SDF government. He might have switched parties, but the allegations of graft have stuck. The electoral bonds saga might have made the BJP more jittery about its prospects in the state and may have therefore called off the alliance."

Reacting to the disclosure that its former ally partner (the BJP) is the biggest beneficiary of the electoral bond scheme, the SKM spokesperson told The Quint that what a party does with "donations" is an internal matter.

"How a party chooses to spend the donations it receives is an internal matter. But parties receiving donations is not unprecedented. Businesses, companies and firms do donate to parties that are in power at the Centre. The BJP has been in power at the Centre for 10 years now, and therefore, it is no surprise that it has received the largest donations in the form of bonds," he told The Quint.

The SKM was still open to the idea of post-poll alliance between the two parties, he concluded.