April 20, 2024

Lukmaan IAS

A Blog for IAS Examination



THE CONTEXT: The electoral bonds scheme in India intended to eliminate black money in election financing but was ultimately declared unconstitutional by the Supreme Court. The scheme’s failure to transform Indian politics or reduce the reliance on illegal funds for election campaigns, emphasizes the gap between the professed aims of political leaders and their actual practices, which undermine democracy.


  • Ineffectiveness of Electoral Bonds: The introduction of electoral bonds was intended to eliminate the use of black money in election financing, aiming to transform Indian politics positively. However, the scheme failed to make any significant difference, as elections continued to be funded by large amounts of illegal funds. The electoral bonds did not address the root issues of undemocratic practices within Indian politics, where elected leaders often serve the interests of their financiers rather than their constituents.
  • Gap Between Professed and Actual Practices: There exists a significant gap between what political leaders profess and their actual practices, undermining democracy. This discrepancy results in government policies that disproportionately benefit vested interests at the expense of the marginalized sections of society. Policies are often designed to appear in the national interest, while they prioritize the interests of the elite.
  • Systematic Illegality and Weak Accountability: The black economy thrives on systematic and systemic illegality, facilitated by the collusion between policymakers, executives, and businesses. This triad of corruption is supported by weak government accountability and a societal mindset that defers authority, further eroding the foundations of democracy in India.
  • Money’s Influence on Elections: Elections require significant funding, far exceeding legal limits, leading to reliance on illegal funds. The cultivation of vote banks, mobilization of crowds, and overwhelming displays of power during campaigns are financed through undeclared incomes. This reliance on illegal funds highlights the deep-rooted issues within the electoral process.
  • Opaque Nature of Electoral Bonds: The electoral bonds scheme was criticized for its opacity, as it did not allow the electorate to know the sources of political financing. This opacity enabled businesses and the wealthy to exert undue influence over political parties, potentially in exchange for favors. The scheme also allowed for donations from shell companies and foreign entities, further obscuring the trail of funds.
  • Cronyism and Quid Pro Quo: Data reveals that political donations through electoral bonds often involve quid pro quo arrangements, where businesses donate to political parties in exchange for policy favors or to avoid prosecution. This practice exposes the cronyism within Indian politics and the manipulation of policies to benefit donors.


  • Strengthening Election Commission Oversight: Empowering the election commission with more resources and authority to oversee and regulate political financing, ensuring adherence to legal limits and transparency requirements.
  • Public Financing of Elections: Introducing or expanding public financing for political campaigns to reduce dependence on private donations. This could involve allocating public funds to political parties based on their performance in elections, thereby leveling the playing field.
  • Caps on Political Spending: Enforcing strict limits on the amount of money political parties and candidates can spend during elections. This would help reduce the influence of money in politics and ensure fairer competition.
  • Legal and Institutional Reforms: Amending laws to close loopholes that allow for unchecked political donations, including donations from shell companies and foreign entities. Strengthening mechanisms for holding politicians and political parties accountable for their actions and financial dealings. This could include more rigorous audits, penalties for violations, and an independent body to investigate and prosecute corruption.
  • Legal Challenges and Judicial Oversight: Encouraging the judiciary to play an active role in reviewing and, if necessary, striking down laws and practices that undermine democratic principles and transparency in political financing.
  • Civic Engagement and Education: Enhancing public awareness and understanding of the political process, the importance of transparency, and the impact of money in politics. Educated voters are more likely to demand accountability and transparency from their elected officials. Fostering a culture of active civic engagement where citizens are encouraged to participate in the political process, including monitoring political financing and advocating for reforms.


The electoral bonds scheme, while intended to clean up election financing, ultimately highlighted and perhaps exacerbated the weaknesses within Indian democracy. It failed to address the systemic issues of corruption, lack of accountability, and the influence of money in politics, thereby undermining the democratic process.


Q.1 Discuss the role of the Election Commission of India in light of the evolution of the Model Code of Conduct. 2022

Q.2 To enhance the quality of democracy in India the Election Commission of India has proposed electoral reforms in 2016. What are the suggested reforms and how far are they significant to make democracy successful? 2017


Q.1 Examine the implications of the electoral bonds scheme on the democratic process in India. Discuss the challenges it poses to transparency and accountability in political funding and suggest measures to address these challenges in the context of strengthening democracy.



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