Supreme Court Strikes Down Electoral Bonds Scheme — SBI Disclosure Ordered
Summary
A five-judge Constitution Bench of the Supreme Court unanimously struck down the Electoral Bonds Scheme, 2018, as unconstitutional in February 2024, holding that anonymous political funding violates the voters' right to information under Article 19(1)(a). The Court ordered the State Bank of India to submit all bond purchase and encashment data to the Election Commission of India for public disclosure.
●The judgment is the most significant electoral reform ruling since the 2013 PUCL judgment that decriminalised note-NOTA and the 2003 ADR judgment mandating candidate disclosure.
Core Arguments
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The judgment establishes that electoral transparency is a constitutional imperative, not merely a policy choice — anonymous funding at scale structurally distorts democratic accountability by severing the visible link between money and political influence.
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The proportionality test applied by the Court — weighing donor privacy against voters' right to know — sets a precedent that in electoral contexts, information rights of citizens outweigh the privacy interests of large corporate donors.
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The scheme's removal of the 7.5% profit cap for corporate donations, combined with anonymity, created a structural incentive for quid pro quo arrangements between industry and government — the Court found this corrupts the democratic process.
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Passing the scheme as a Money Bill to avoid Rajya Sabha scrutiny raises a broader constitutional question about the misuse of the Money Bill classification to bypass the upper house — a governance integrity issue that the judgment touched on but did not fully resolve.
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The judgment revives the long-standing debate on state funding of elections as the only genuinely neutral alternative — without public funding reform, banning bonds without a replacement risks pushing political financing further underground.
Dimensional Angles
Political
Asymmetric benefit to ruling parties — data revealed 57% of bonds went to the BJP; opposition parties received smaller shares. Raises questions about level playing field in competitive democracy.
Legal
Constitutional validity of passing electoral finance law as Money Bill; proportionality doctrine in fundamental rights adjudication; right to information as component of Article 19(1)(a).
Economic
Corporate political donations as governance risk — companies donating to parties that regulate them creates conflict of interest; affects investor confidence in regulatory neutrality.
Governance
ECI's institutional role in enforcing disclosure; gap between legal mandate and administrative capacity; need for real-time digital disclosure of political funding.
Value-Adds for Answers
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Data point: ₹16,518 crore worth of electoral bonds were purchased between March 2018 and January 2024 — the BJP received approximately ₹6,986 crore (57%), the TMC ₹1,609 crore, and the Congress ₹1,421 crore.
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Comparison: Germany's party finance model requires disclosure of all donations above €10,000 annually — published in Bundestag records. UK requires quarterly disclosure of donations above £7,500 to the Electoral Commission.
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Historical: The 2003 ADR judgment (People's Union for Civil Liberties v. Union of India) first established that voters have a fundamental right to know about candidates' criminal and financial backgrounds — the 2024 judgment extends this principle to party funding.
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Quote: CJI Chandrachud in the judgment — 'Anonymity in political funding is antithetical to the foundational principle of free and fair elections which is a basic feature of the Constitution.'
Related Past Questions
Discuss the role of the Election Commission of India in the light of the evolution of the Model Code of Conduct.
Discuss the recommendations of the Law Commission of India on Electoral Reforms with reference to the regulation of political parties.