Unravelling the Electoral Bonds Scheme: A Legal Journey towards Transparency

Abstract

The Indian government launched the Electoral Bonds Scheme in 2018 with the goal of preserving donor anonymity while promoting openness in political financing. However, the scheme has sparked extensive debate over its effectiveness and potential for misuse. This paper traces the legal journey of the Electoral Bonds Scheme, analysing its implications on transparency, accountability, and democracy in India. Through a detailed examination of legislative provisions, judicial scrutiny, and public discourse, the paper explores whether the scheme has succeeded in its objectives or has inadvertently facilitated opacity in political financing. By unravelling the complexities of the Electoral Bonds Scheme, this study provides insights into the ongoing quest for transparency in India's electoral process. This paper offers a comprehensive analysis of the legal trajectory and constitutional aspects of the Electoral Bonds Scheme, mapping out significant legislative developments and the scrutiny it has undergone before the Supreme Court of India. It investigates how the scheme aligns with core democratic ideals such as transparency, accountability, and equitable electoral practices. By examining alterations made through the Finance Acts and amendments to key laws including the Representation of the People Act, the Companies Act, and the Income Tax Act, the study reveals how these changes have permitted unchecked corporate contributions while weakening existing regulatory checks. In addition, the paper delves into broader societal reactions, drawing from media exposés, civil society critiques, and reports by oversight institutions that highlight concerns over the scheme’s opacity. Particular emphasis is placed on the imbalance in fund allocation favouring the ruling party, the absence of donor disclosure, and the potential for misuse of government systems. The study questions whether the scheme has genuinely met its goals or instead fostered a hidden, less accountable model of political financing.