Supreme Court Declares Electoral Bonds Scheme Unconstitutional: Grounds of Verdict

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February 15, 2024

Supreme Court Declares Electoral Bonds Scheme Unconstitutional: Grounds of Verdict


  • The Supreme Court of India, in a landmark decision, deemed the electoral bonds scheme unconstitutional, citing various legal concerns. The verdict, delivered by a five-judge bench, addressed pivotal issues ranging from donor privacy to the fundamental right to information. Here, we delve into the grounds on which the verdict was based.


  • The electoral bonds scheme, introduced in 2017, allowed anonymous donations to political parties via bonds purchased from the State Bank of India. Advocates of the scheme argued it would bring transparency to political funding, while critics raised concerns over opacity and potential favoritism towards the ruling government.

Challenges in Court:

  • Petitions filed by entities including the Communist Party of India (Marxist) and NGOs Common Cause and ADR questioned the scheme’s legality. Arguments highlighted citizens’ right to information regarding political funding, potential misuse by corporations, and the impact on shareholder interests.

Verdict Analysis:

  • The Supreme Court’s verdict addressed several key issues:
  • Violation of Right to Information (RTI): The court ruled that the electoral bonds scheme infringed upon the fundamental right to information, as transparency in political funding is crucial for informed voting. It emphasized the deep connection between economic and political inequality, stating that the scheme hampers the free flow of information necessary for a democratic process.
  • Legitimacy of Curbing Black Money: While acknowledging the government’s aim to curb black money in electoral financing, the court deemed the restrictions imposed by the scheme disproportionate. It stressed that legitimate restrictions on RTI must be proportional to the objective, which the scheme failed to meet. Additionally, the court suggested alternative, less restrictive methods to achieve the same goal.
  • Protection of Donor Privacy: The verdict delved into the right to privacy of political affiliation, affirming that it encompasses financial contributions to political parties. It argued that withholding donor information could lead to voter surveillance and disenfranchisement. However, it differentiated between genuine political support and contributions aimed at influencing policies, stating that privacy protection extends only to the former.
  • Limitation on Corporate Contributions: The court asserted that unrestricted political contributions by corporations are unconstitutional, given their disproportionate influence and potential for quid pro quo arrangements. It highlighted the need to prevent companies from using donations solely for securing benefits, thereby safeguarding the integrity of the political process.


  • In conclusion, the Supreme Court’s verdict on the electoral bonds scheme underscores the importance of transparency, democratic principles, and the protection of fundamental rights in India’s electoral system. By striking down the scheme as unconstitutional, the court reaffirmed its commitment to upholding the integrity of the democratic process and ensuring accountability in political financing.

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Supreme Court Declares Electoral Bonds Scheme Unconstitutional: Grounds of Verdict | Vaid ICS Institute