For this article:

29 Dec 2025·Source: The Indian Express
3 min
Polity & GovernanceEDITORIAL

Electoral Bonds: Urgent Reforms Needed for Transparent Political Funding

Opaque electoral bonds undermine democratic competition, demanding urgent reforms for transparency in political funding.

Electoral Bonds: Urgent Reforms Needed for Transparent Political Funding

Photo by Tiffany Tertipes

संपादकीय विश्लेषण

The current political funding system, particularly electoral bonds, lacks transparency and undermines democratic competition by favoring ruling parties and large corporations, necessitating urgent reforms.

मुख्य तर्क:

  1. Electoral bonds obscure the source of political donations, making it impossible for citizens to know who funds political parties, thereby violating the fundamental right to information.
  2. The system disproportionately benefits the ruling party, creating an uneven playing field and hindering fair democratic competition by giving an advantage to incumbents.
  3. Corporate donations through electoral bonds are often linked to quid pro quo arrangements, leading to potential corruption and crony capitalism, undermining ethical governance.
  4. The lack of transparency allows for the potential use of shell companies and foreign funding, posing risks to national security and the integrity of democratic processes.
  5. The Supreme Court has a crucial role in ensuring transparency and upholding democratic principles by striking down the opaque electoral bond scheme to protect constitutional values.

प्रतितर्क:

  1. The government's argument for electoral bonds was to curb black money and provide a clean funding mechanism, but the authors contend that it has failed to achieve genuine transparency and has instead created a new form of opacity.

निष्कर्ष

The Supreme Court must strike down the electoral bond scheme to restore transparency in political funding, strengthen democratic competition, and protect citizens' right to information, ensuring a healthier democracy.

नीतिगत निहितार्थ

There is a critical need for comprehensive electoral finance reforms, including greater transparency in donations, stricter regulation of corporate funding, and strengthening the Election Commission's powers to ensure fair elections.

Here's what matters: India's political funding system, particularly the electoral bond scheme, urgently needs reform to ensure transparency and protect democratic competition. The surprising fact is that 94% of corporate donations to political parties between 2018-2022 were made through these opaque electoral bonds, making it impossible for citizens to know who funds their political representatives. Think of it like a black box where money goes in, but you can't see who put it there or where it's going.

For a UPSC aspirant, this issue directly impacts the integrity of elections and governance, a core GS2 topic. The Supreme Court's ongoing hearings on electoral bonds are critical, as this topic has been a recurring point of debate and potential Mains questions. Before electoral bonds, there were other opaque methods, but this scheme centralized the opacity, making it harder to track funding.

मुख्य तथ्य

1.

Electoral bonds were introduced in 2018.

2.

94% of corporate donations to political parties (2018-2022) were via electoral bonds.

3.

Approximately ₹12,000 crore worth of electoral bonds have been sold since 2018.

4.

The Supreme Court is currently hearing petitions challenging the scheme.

UPSC परीक्षा के दृष्टिकोण

1.

Constitutional validity of the Electoral Bond Scheme (Article 19(1)(a) - Right to Know vs. donor privacy).

2.

Role of Election Commission of India in electoral reforms and regulating political funding.

3.

Impact of opaque funding on free and fair elections, democratic competition, and governance.

4.

Legislative changes made to facilitate electoral bonds (e.g., amendments to Representation of the People Act, Companies Act, Income Tax Act, RBI Act).

5.

Comparison with international best practices for political funding transparency.

दृश्य सामग्री

Evolution of Electoral Bonds Scheme & Transparency Debate (2017-2025)

This timeline traces the key legislative, judicial, and public developments surrounding the Electoral Bonds Scheme, from its introduction to the ongoing Supreme Court hearings, highlighting the continuous debate on transparency in political funding.

The Electoral Bonds Scheme was introduced as a major reform to political funding, but its design, particularly the anonymity of donors, quickly became a focal point of criticism. The Supreme Court's intervention marks a critical juncture in the ongoing efforts to balance ease of donation with transparency and accountability in India's democratic process.

  • 2017Electoral Bonds Scheme introduced via Finance Act 2017, amending multiple acts. Aimed at 'cleansing' political funding but criticized for anonymity.
  • 2018First tranche of Electoral Bonds issued by SBI. Petitions filed in Supreme Court challenging the scheme's constitutionality.
  • 2019Supreme Court issues interim order, directing political parties to submit details of electoral bond donations to ECI in sealed cover. ECI and RBI raise concerns about opacity.
  • 2020Association for Democratic Reforms (ADR) reveals significant corporate donations through EBs, intensifying transparency debate.
  • 2022Data reveals 94% of corporate donations (2018-2022) made through opaque electoral bonds, fueling public and judicial scrutiny.
  • 2024Supreme Court commences extensive hearings on the constitutional validity of the Electoral Bonds Scheme, focusing on Right to Information (Article 19(1)(a)).
  • 2025Supreme Court's verdict on Electoral Bonds Scheme widely anticipated, expected to redefine political funding landscape in India. Calls for comprehensive electoral reforms intensify.
और जानकारी

पृष्ठभूमि

Political funding in India has historically been a contentious issue, marked by a lack of transparency and reliance on cash donations. Various attempts have been made to regulate it, including limits on cash donations and the introduction of Electoral Trusts. The Electoral Bond Scheme, introduced in 2017 through the Finance Act 2017, was touted as a measure to cleanse political funding by promoting digital transactions and reducing cash, but it faced immediate criticism for introducing a new layer of opacity.

नवीनतम घटनाक्रम

The Supreme Court of India is currently hearing petitions challenging the constitutional validity of the Electoral Bond Scheme. The scheme allows individuals and corporations to donate to political parties anonymously through bonds purchased from the State Bank of India.

The key concern is that while the government and the bank know the donor, the public and opposition parties do not, making it impossible to trace the source of funding. Recent reports highlight that a significant majority (94%) of corporate donations between 2018-2022 were made through these opaque bonds, intensifying calls for urgent reforms.

बहुविकल्पीय प्रश्न (MCQ)

1. With reference to the Electoral Bond Scheme in India, consider the following statements: 1. Electoral bonds can be purchased by any Indian citizen or a body incorporated in India. 2. Only political parties registered under Section 29A of the Representation of the People Act, 1951, and which secured at least one percent of the votes polled in the last general election or assembly election, are eligible to receive electoral bonds. 3. The bonds are issued in multiples of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh, and ₹1 crore, and are valid for fifteen calendar days from the date of issue. Which of the statements given above is/are correct?

उत्तर देखें

सही उत्तर: D

Statement 1 is correct: Electoral bonds can be purchased by a citizen of India or a body incorporated in India. Statement 2 is correct: Only political parties registered under Section 29A of the Representation of the People Act, 1951, and which secured at least one percent of the votes polled in the last general election or assembly election, are eligible to receive electoral bonds. Statement 3 is correct: The bonds are issued in multiples of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh, and ₹1 crore, and are valid for fifteen calendar days from the date of issue. All three statements accurately describe features of the Electoral Bond Scheme.

2. Which of the following legislative amendments were introduced to facilitate the implementation of the Electoral Bond Scheme and faced scrutiny regarding their impact on transparency? 1. Amendment to Section 29C of the Representation of the People Act, 1951. 2. Amendment to Section 182 of the Companies Act, 2013. 3. Amendment to Section 13A of the Income Tax Act, 1961. 4. Amendment to Section 31 of the Reserve Bank of India Act, 1934. Select the correct answer using the code given below:

उत्तर देखें

सही उत्तर: D

All four legislative amendments were crucial for the implementation of the Electoral Bond Scheme and have been subjects of legal challenge due to their implications for transparency. 1. Section 29C of the Representation of the People Act, 1951: Exempted political parties from disclosing donations received through electoral bonds to the Election Commission. 2. Section 182 of the Companies Act, 2013: Removed the cap on corporate donations (previously 7.5% of average net profit) and the requirement to disclose the names of political parties to whom donations were made in their profit and loss accounts. 3. Section 13A of the Income Tax Act, 1961: Exempted political parties from keeping a record of contributions received through electoral bonds, thus making them exempt from income tax on such donations without full disclosure. 4. Section 31 of the Reserve Bank of India Act, 1934: Amended to allow the central government to authorize any scheduled bank to issue electoral bonds, thereby bypassing the RBI's exclusive power to issue bearer bonds and allowing the government to introduce a new financial instrument.

GKSolverआज की खबरें