Unveiling the Electoral Bonds Saga: India’s Path to Transparent Political Funding 


The Electoral Bonds Scheme, introduced in 2018, was envisioned as a milestone in India’s political funding landscape, aiming to cleanse the system and enhance transparency. However, recent developments have highlighted significant concerns regarding its efficacy and implications for democracy. In a historic decision on February 15, 2024, the Supreme Court of India declared the scheme unconstitutional, citing violations of fundamental rights and democratic principles. This article delves into the intricacies of the Electoral Bonds Scheme, the rationale behind its downfall, and proposes alternative avenues for transparent electoral funding in India. 

The Electoral Bonds Scheme: 

Electoral bonds, akin to promissory notes, allowed companies and individuals to purchase bonds from the State Bank of India (SBI) and donate them to political parties. These bonds, redeemable only in the designated accounts of registered political parties, were intended to bring transparency to political funding by digitizing the process. 

Amendments Made in 2022: 

In a bid to enhance the scheme’s functionality, amendments were introduced in 2022, including an extended issuance period during elections and revised validity periods for bonds. However, these changes failed to address fundamental flaws in the scheme. 

Supreme Court’s Verdict: 

The unanimous verdict by the Constitution Bench of the Supreme Court struck down the Electoral Bonds Scheme, citing violations of the right to information and disproportionate measures to curb black money. The court emphasized the intrinsic link between transparency and participatory democracy, underscoring the scheme’s failure to uphold these principles. 

Concerns Raised: 

Critics raised several concerns regarding the Electoral Bonds Scheme, including its contradictory nature, potential for extortion, and erosion of democracy. The anonymity afforded by the scheme, coupled with the lack of disclosure requirements, raised red flags regarding its impact on free and fair elections.

Association for Democratic Reforms (ADR) Report: 

The ADR report highlighted skewed ratios of donations and funding sources, with electoral bonds dominating political funding. This imbalance raised questions about the influence of corporate donations on political decisions and underscored the need for comprehensive reform. 

Suggestions for Electoral Funding: 

To address the shortcomings of the Electoral Bonds Scheme, various suggestions have been proposed. These include regulations on donations, limits on expenditure, and public funding for parties based on predetermined criteria. Additionally, disclosure requirements and innovative models such as democracy vouchers offer promising avenues for transparent electoral funding. 

Recommendations on Funding of Political Parties: 

Previous committees and commissions have recommended state funding of elections with limitations to ensure a level playing field for all parties. The Election Commission stressed the importance of annual financial disclosures by political parties, while the Law Commission advocated for stringent regulations on funding sources. 


The Supreme Court’s decision to strike down the Electoral Bonds Scheme marks a significant milestone in India’s democratic journey. It underscores the importance of transparency and accountability in political funding, essential pillars of a vibrant democracy. Moving forward, policymakers must heed the court’s verdict and embark on comprehensive reforms to ensure that electoral funding aligns with democratic principles and safeguards the integrity of the electoral process.