Supreme Court on Electoral Bonds in India: Corporate Funding, Economic Policy and Democratic Polity
Padma Singh
Assistant Professor of Law, National Law Institute University, Bhopal, India.
10.46679/9789349926141ch02
This chapter is a part of: Law and Economics in India: Market Governance, Digital Change, and Inclusive Growth from India
ISBN (Ebook): 978-93-49926-14-1
ISBN (Hardcover Print): 978-93-49926-73-8
ISBN (Softcover Print): 978-93-49926-54-7
© CSMFL Publications & its authors.
Published: April 15, 2026
Abstract
The research paper critically examines India’s Electoral Bonds Scheme, introduced in the 2017 Union Budget and implemented in 2018 to regulate political funding. Designed to promote transparency and curve black money, electoral bonds allowed anonymous donation to political parties through the State Bank of India. Donuts could claim tax deductions under Section 80GGB of the Income Tax Act, while political parties were expected to encash these within 15 days. While proponents argue that the scheme promotes cashless transactions and protects donor privacy, critics-including Election Commission of India and the Reserve Bank of India-have raised concerns over its opacity, potential for corporate influence and erosion of institutional accountability. The Supreme Court’s 2024 ruling declared the scheme unconstitutional, sighting a violation of democratic principles and transparency Norms. The paper explores how amendments of Section 182 of the Companies Act, 2013 diluted earlier safeguards by removing disclosure requirements and allowing unlimited corporate donations. It also highlights, judicial and regulatory concerns about the bond’s susceptibility to miss you and fraud. The research concludes by advocating for political funding reforms that balance transparency with donor privacy, ensuring democratic integrity, public accountability, and the prevention of undue corporate influence.
Keywords: Electoral Bonds, Political Funding, Transparency, Supreme Court of India, Corporate Donations Companies Act, 2013
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