In a unanimous five-judge Constitution Bench verdict that has sent shockwaves through India’s political landscape, the Supreme Court of India has struck down the Electoral Bonds Scheme as unconstitutional, calling it a direct assault on voters’ right to know who is funding political parties.
What Are Electoral Bonds?
Electoral bonds are interest-free bearer instruments that any Indian citizen or company incorporated in India can purchase from the State Bank of India (SBI) in specified denominations — ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh, and ₹1 crore — and donate to a registered political party. The bonds are redeemable only by political parties and the donor’s identity is not disclosed publicly.
The scheme was introduced in 2018 by the Modi government as a way to bring transparency into political funding by routing cash donations through the banking system. Critics, however, argued that the anonymous nature of the bonds achieved the opposite effect.
The Verdict
The bench, led by Chief Justice D Y Chandrachud, held that the scheme violated Article 19(1)(a) of the Constitution — the fundamental right to freedom of speech and expression — which includes the right to information.
“Voters have a right to know about the sources of political funding. Anonymity in political donations violates this right and strikes at the heart of free and fair elections.”
The court ordered SBI to immediately stop issuing electoral bonds and directed the Election Commission of India (ECI) to publish all details of bonds purchased and redeemed since the scheme’s inception in 2018.
Political Fallout
Data released pursuant to the court’s order revealed that the ruling Bharatiya Janata Party (BJP) received approximately 57% of the total ₹16,518 crore raised, followed by the Trinamool Congress and the Indian National Congress.
Opposition parties called the verdict a vindication of their long-standing criticism of the scheme.
Why It Matters
India runs the world’s largest elections. The 2024 General Elections saw an estimated ₹1.35 lakh crore spent across all parties. The Supreme Court’s verdict ensures that Indian voters will be able to see a clearer picture of who is bankrolling the parties they vote for.
What Happens Next?
- SBI must halt all further issuance of electoral bonds
- All unredeemed bonds must be returned to SBI
- The Election Commission must publish complete donor-party data
- Parliament may now need to devise a new constitutional framework for transparent political funding
Constitutional experts say this verdict will rank alongside landmark decisions like Kesavananda Bharati and S.R. Bommai as a defining moment for Indian democracy.