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Current Affairs

Electoral bonds scheme

Date: 09 April 2022 Tags: Miscellaneous


The Supreme Court will soon take up the plea challenging the Electoral Bond Scheme, the Chief Justice of India has assured.



The electoral bond scheme was challenged by NGOs Common Cause and Association for Democratic Reforms (ADR).



  • Electoral bonds are instruments through which individuals can donate money to political parties. They can be bought from authorized branches of the State Bank of India.

  • They are sold in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore. They can be bought by paying money digitally or through cheques.

  • The buyer can then give the bond to the political party of his choice, which then has to be encashed by them within 15 days.

  • The process of the scheme has been made in such a way that the name of the donor remains anonymous.


Reasons for introduction

  • The main objective behind introduction of electoral bonds scheme was to bring about transparency in electoral funding in India.

  • The scheme will ensure that funding is done through banking without use of methods such as hawala or black money.



The scheme does not allow funding for political parties outside India. It also reduced the amount of money accepted in cash from Rs 20,000 to Rs 2,000. 



  • Critics say that it does not bring transparency to electoral funding as bonds are provided by state owned bank, data of which can be accessed by the government.

  • The government can use the information to target companies donating to opposition parties through state power.

  • Data has shown that more than 75 percent of the donations have gone towards the ruling party at the centre.

  • The scheme envisioned common people to fund political parties but more than 90 percent of electoral bonds sold was of denomination of 1 crore.

  • Before the scheme came into existence, corporate could donate to a political party only 7.5 per cent of the average net profits of a company in the preceding three years.

  • The cap has now been removed under the Companies Act to allow unlimited funding by corporate of India.