What is Electoral Bonds

Discover the concept, purpose, and controversies surrounding electoral bonds in India. Learn about the benefits and drawbacks of this unique political funding instrument.


Electoral bonds are a unique financial instrument that is used for funding political parties in India. Introduced in 2018, electoral bonds have sparked debates and discussions about transparency, accountability, and political funding in the country. In this article, we will delve into the concept of electoral bonds, their purpose, benefits, and drawbacks.

What are Electoral Bonds?

Electoral bonds are interest-free bearer bonds that can be purchased by any individual or corporate entity from selected branches of authorized banks. These bonds are issued in denominations ranging from Rs. 1,000 to Rs. 1 crore and are valid for 15 days. The purchaser can then donate these bonds to a political party of their choice, who can encash them through their designated bank account. The identity of the donor is kept anonymous.

Purpose of Electoral Bonds

The primary aim of electoral bonds is to bring transparency to political funding in India. By channeling donations through banking channels, the government hopes to curb the flow of black money into the electoral process. Additionally, electoral bonds are meant to provide a legitimate way for individuals and corporates to support political parties without fear of retribution or harassment.

Benefits of Electoral Bonds

  • Enhanced Transparency: Electoral bonds create a paper trail for political donations, making it easier to track and monitor the flow of funds.
  • Reduced Corruption: By promoting digital transactions, electoral bonds aim to minimize the use of unaccounted money in politics.
  • Increased Participation: Electoral bonds provide a legal means for citizens and corporates to contribute to the democratic process.

Drawbacks of Electoral Bonds

  • Anonymity: Critics argue that the anonymity of donors through electoral bonds can lead to potential misuse and lack of accountability.
  • Lack of Public Disclosure: Unlike traditional forms of political funding, electoral bonds do not require political parties to disclose the identity of their donors, raising concerns about opacity.
  • Unequal Access: Small political parties and independent candidates may struggle to attract funding through electoral bonds due to their reliance on larger donors.

Case Study: India’s Experience with Electoral Bonds

Since their introduction in 2018, electoral bonds have become a significant part of India’s political funding landscape. According to reports, political parties have received substantial amounts through electoral bonds, with the ruling party dominating the contributions. This has led to questions about the fairness and impartiality of the electoral bond system.


Electoral bonds represent a novel approach to political finance in India, aiming to strike a balance between transparency and confidentiality. While they offer certain benefits such as enhanced accountability and reduced corruption, concerns remain about their impact on democratic principles and fairness. As the debate on electoral bonds continues, it is essential to consider their implications on the electoral process and the functioning of democracy.

Leave a Reply

Your email address will not be published. Required fields are marked *