Electoral Reforms In India

Electoral bond scheme


From UPSC perspective, the following things are important :

Prelims level : Electoral bonds

Mains level : Paper 2- Issues with electoral bonds


Ever since its introduction, the electoral bond scheme has envenomed the democratic process, by destroying altogether any notion of transparency in political funding.

Issue of anonymity in electoral bond

  • The electoral bond scheme is designed to allow an individual, or any “artificial juridical person”, including body corporates, to purchase bonds issued by the State Bank of India during notified periods of time.
  • These instruments are issued in the form of promissory notes, and in denominations ranging from ₹1,000 to ₹1 crore.
  • Once purchased, the buyer can donate the bond to any political party of their choice and the party can then encash it on demand.

Supreme Court’s opinion

  • The Supreme Court has allowed the scheme to continue unabated and has denied an interim stay on its operation.
  • In one such provisional order, the Court asserted that the bonds were not, in fact, anonymous.
  • According to the Court, since both the purchase and the encashment of bonds are made through banking channels, all it would take for a person to glean the identity of a donor was for her to look through every corporation’s financial statement — these records, the Court said, ought to be available with the Registrar of Companies.
  • What the order ignored was that there is no attendant obligation on political parties to provide details to the public on each donation received by them through electoral bonds.
  • Companies are also under no obligation to disclose the name of the party to whom they made the donation.

Violation of voter’s right

  •  The Supreme Court has consistently held that voters have a right to freely express themselves during an election and that they are entitled to all pieces of information that give purpose and vigour to this right.
  • Surely, to participate in the electoral process in a meaningful manner and to choose one’s votes carefully, a citizen must know the identity of those backing the candidates.

Electoral bond does not eliminate the role of black money in funding elections

  • As affidavits filed by the Election Commission of India in the Supreme Court have demonstrated, the scheme, if anything, augments the potential role of black money in elections.
  • It does so by, among other things, removing existing barriers against shell entities and dying concerns from donating to political parties.
  • Moreover, even if the bonds were meant to eliminate the presence of unaccounted currency, it is difficult to see what nexus the decision to provide complete anonymity of the donor bears to this objective.
  • It is for this reason that the Reserve Bank of India reportedly advised the Government against the scheme’s introduction.


The worries over the electoral bond scheme, however, go beyond its patent unconstitutionality. This is because in allowing anonymity it befouls the basis of our democracy and prevents our elections from being truly free and fair.

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