Undermining Democracy: The Unconstitutional Nature Of Electoral Bonds
- IJLLR Journal
- Apr 7
- 2 min read
Saumitra Deep Dwivedi, LL.M., Amity Law School, Amity University
Dr Jyoti Yadav, Assistant Professor, Amity Law School, Amity University
ABSTRACT
This paper discusses the Indian Supreme Court’s recent decision to strike down the electoral bonds scheme for political donation, ruling it unconstitutional. Electoral bonds, introduced in 2017, allowed individuals and corporations to donate money to political parties anonymously. While the government claimed this would help curb illegal cash donations, critics argued that it enabled unchecked corporate influence in political process by allowing unlimited, unregulated funding without transparency.
The paper explains how the system worked: donors could purchase bonds of different values through the State Bank of India and deposit them directly into political party accounts without revealing their identities. Between 2018 and 2022, nearly $2 billion worth of bonds were issued, with the ruling party ie. Bharatiya Janata Party (BJP) receiving the majority—about 60%—of the donations. Opposition parties argued that this system encouraged money laundering and allowed corporations to exert hidden influence over policymaking.
The Supreme Court unanimously ruled that electoral bonds violated citizens' right to know who funds political parties, a key aspect of democracy. The judges determined that the need for transparency outweighed donor privacy concerns and rejected the government's argument that the system helped reduce black money in election process. As a result, the State Bank of India was made required to disclose all details of past bond transactions to the Election Commission, which will make this information public before the 2024 national elections.
The paper explores the broader impact of this verdict, particularly on political party finances and electoral integrity in India. It also compares India's political donation regulations with those in countries like the UK, US, and Germany. Finally, the paper emphasizes the need to balance transparency with legitimate privacy concerns when designing fair and constitutional political funding systems. Ensuring openness in political donations will strengthen Indian democracy by allowing voters to understand and monitor financial influences on political parties.
Keywords: Electoral bonds, Political funding, Anonymous donations, Transparency, Right to Information, Supreme Court Judgement, Electoral Funding reforms, Party donations, Elections, Democracy.
