Introduction
Introduced in 2017–18 as part of the Finance Act, the Electoral Bond Scheme enabled individuals and corporations to donate anonymously to political parties through bearer-like bank instruments, purchasable from authorized SBI branches. Though originally pitched as a mechanism to clean political funding, critics—including ADR, Common Cause, and CPI(M)—challenged it for undermining transparency and facilitating potential crony capitalism. Deccan Herald+15Supreme Court Observer+15AP News+15
Why the Scheme Faced Legal Challenge
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Anonymity for Donors: No public disclosure on the source of funds conflicted with the democratic principle of informed voting. Supreme Court ObserverPoliLegal - Politics, Law & Society
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Unlimited Corporate Donations: Amendments defeated earlier corporate-spending limits, raising worries about disproportionate influence by large businesses. PoliLegal - Politics, Law & SocietySupreme Court Observer
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Money Bill Route: Its passage as a Money Bill limited Rajya Sabha oversight—raising constitutional alarm over legislative bypass. Global Voices+5The Economic Times+5Supreme Court Observer+5
The February 15, 2024 Verdict
Constitution Bench (led by Chief Justice DY Chandrachud) concluded unanimously that:
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The Scheme violated Article 19(1)(a)—the right to information—integral to free and fair elections. PoliLegal - Politics, Law & Society+2Supreme Court Observer+2Vajiram & Ravi+2
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It undermined equality under Article 14, by giving an upper hand to entities capable of buying large bonds. PoliLegal - Politics, Law & Society
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SBI was ordered to submit records of bonds issued since April 2019 to the Election Commission. From there, data was to be made public. The Guardian+7Supreme Court Observer+7TIME+7
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Issuance of new bonds was halted immediately. Supreme Court Observer+1Deccan Herald+1
Immediate Aftermath
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SBI complied, providing data by March 12, 2024; ECI uploaded it soon after. Wikipedia
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Data revealed that BJP received nearly half of all bond donations (~₹6,060 crore), while Congress and other parties got significantly less. SCC Online+11Wikipedia+11The Guardian+11
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Over 1,300 donors, including major corporations, initiated tax investigations regarding their claim of deductibility. Wikipedia+1ETCFO.com+1
Significance of the Verdict
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Reinforces Right to Know: Upholds that political funding transparency is critical for informed democracy. Wikipedia+8TIME+8SSRN+8
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Curbing Corporate Influence: Mandates accountability in political financing. Wikipedia+7TIME+7Supreme Court Observer+7
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Judicial Restraint on Executive: Demonstrates that even a Money Bill bypassing the upper house is open to judicial review. The Economic TimesSupreme Court Observer
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Catalyst for Reform: Opens the door for stricter, regulated political funding mechanisms—possibly including caps or public financing. SSRN+1Supreme Court Observer+1
Criticisms & Challenges
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Shift Back to Cash: PM Modi warned this might fuel a resurgence of unaccounted money in politics. Reuters
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Opaque Pre-2019 Data: Public availability begins post-April 2019—leaving pre-2019 data hidden.
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Enforcement and Reform Gap: No immediate replacement framework; critics call for transparent caps and full disclosure. SSRNWikipedia
Conclusion
The Electoral Bonds verdict marks a watershed moment in India’s democratic journey: from opaque to transparent political funding. By rooting ID transparency and voter rights at the heart of political finance, the Supreme Court reaffirmed democratic ethos.
The post-verdict period is crucial. Will reforms deliver structured, regulated, and equitable political funding—or will opaque practices reemerge under different guises?