The Unconstitutional Nature of Electoral Bonds in India: Impacts on Political Transparency and the Democratic Process

Abstract

This paper examines the recent Indian Supreme Court ruling declaring electoral bonds unconstitutional. Electoral bonds were introduced in 2017 as an anonymous way for donors to fund political parties. However, critics argued that the lack of transparency allowed unlimited and unregulated corporate donations to parties. This violated the citizen's right to information under the Indian Constitution. The paper outlines how electoral bonds operate via the State Bank of India. Donors could anonymously purchase bonds of various amounts, depositing money directly into the parties' accounts. From 2018 to 2022, bonds worth nearly $2 billion were issued, with the ruling BJP receiving 60% of the donations. Opposition parties claimed the system enabled money laundering and unfair political influence by corporations. Analyzing the Supreme Court's rationale, the paper shows how the judges ruled unanimously that bonds contravened the people's right to know the source of political funding. This right outweighed arguments to protect donor privacy. The court also found the bonds failed to curb black money as claimed. As a result, the State Bank must disclose all bond transaction details to the Election Commission. This data will be made public before the upcoming 2024 national elections. The implications of this verdict are explored, including impacts on ruling party finances and India's electoral integrity. Comparisons are made to the political donation laws in the UK, US, and Germany. The paper concludes by emphasizing the need to balance transparency with legitimate privacy concerns in designing fair, constitutional systems of political finance. This will strengthen Indian democracy by enabling voter knowledge and oversight of donor influences. The abstract summarizes the background context, key aspects, court ruling arguments, implications, and conclusions of the full research paper. It outlines the significance of the topic by highlighting how the case upheld democratic principles of transparency and accountability against potential abuses of anonymous political funding.