Electoral Bonds: History, Controversy, and Supreme Court Ruling

The government defended the scheme on two grounds: it moved political money from cash into the banking system, and it protected donors from retaliation by parties they had not funded. The Court accepted that curbing black money was a legitimate aim, but held that secrecy from voters was not necessary to achieve it. Information about funding, it said, is essential for informed voting, because money can buy access and influence policy, and a party in power is in a position to return favours.

The Court also recognised that donors have a right to privacy in their political affiliation, but held that this did not extend to large contributions that could be made to influence policy. Electoral trusts and capped, disclosed donations were less restrictive options already available. On company funding, it found that removing the 7.5% cap let loss-making and shell companies donate without limit and treated political contributions by companies the same as those by individuals, which was manifestly arbitrary.

What the judgment did not do also matters. It did not declare any donation corrupt, it did not order donations returned, and it left the Money Bill question to a larger bench.

The matched data let reporters line up purchases with company histories. Investigations by outlets including The Indian Express, The Hindu, Newslaundry, Scroll and The Reporters’ Collective found companies that bought bonds after raids by the Enforcement Directorate or income-tax authorities, others that bought bonds around the time they won large government contracts or approvals, pharmaceutical firms that had failed drug-quality tests, and at least 16 of the top 200 buyers that had made losses in each of the three previous years.

These are patterns, not proof. A purchase followed by a contract does not establish that one caused the other, and donations went to opposition parties governing states as well as to the BJP. The Supreme Court declined to order a special investigation, and the one criminal case that was registered, in Bengaluru, was quashed by the Karnataka High Court in December 2024.

More than two and a half years after the verdict, the government has not proposed a replacement for electoral bonds, and the main reforms petitioners asked for, such as real-time disclosure, limits on corporate giving and public funding of elections, have not been adopted. Money has instead moved to routes that already existed. In 2024-25, electoral trusts paid out ₹3,826 crore, roughly three times the previous year, and the BJP’s declared donations rose to ₹6,088 crore.

Transparency is better than in the bond years: trusts and parties must name donors who give more than ₹20,000. But a voter still cannot see which company’s money a trust passed to which party, and small and cash donations remain anonymous. ADR’s March 2026 report argues that the concentration of funding in a single party, under bonds and trusts alike, narrows the field of parties that can compete.

The Electoral Bond Scheme promised cleaner political money and delivered six years in which the largest donations in India’s history were made without voters knowing their source. The Supreme Court’s judgment did not end corporate funding or settle claims of quid pro quo, but it established that the public’s interest in knowing who funds parties outweighs secrecy for big donors.

The bond years are now an open record on the Election Commission’s website. Whether India builds a funding system that is both transparent and fair to smaller parties is the question the verdict left for Parliament.