Published on: 31st March 2026
Authored By- Sanah Sumbhania
The political funding, which repletes with discourses on the accountability, transparency, and the rights of voters, is the bedrock of electoral democracy. In the 2024 decision of the Association for Democratic Reforms v. Union of India, the Supreme Court of India then challenged the constitutional validity of the Electoral Bond Scheme, which was then later introduced in 2018 to ensure that anonymous donations to political parties are made through bearer instruments. This case is very significant because it aims to ascertain whether the right to free and fair elections and Article 19(1)(a) are compatible with the preservation of politicaldonation secrecy. This case is important in determining the compatibility of the right to free and fair elections, as well as Article 19(1)(a), and the secrecy of political donations. On the 15th of February 2024, a five-judge Constitution Bench which consisted of Chief Justice D.Y. Chandrachud and Justices Sanjiv Khanna, B.R. Gavai, J.B. Pardiwala, and Manoj Misra gave the judgment. The Association for Democratic Reforms was one of the petitioners who hadfiled the petitions under Article 32. The Electoral Bond Scheme has made it trouble-free for people and businesses to purchase bonds from the State Bank of India and then give them to political parties that qualified. Since the bonds were bearer documents, therefore the donors’ identities were kept secret. Modifications to the Income Tax Act, the Companies Act, and the Representation of the People Act raised the corporate donation cap and eliminated the requirement for information disclosure. This was criticised for encouraging electoral funding to be opaque and for giving anonymous funds undue influence over the democratic process. The Court was asked to determine whether the voter’s right to information under Article 19(1)(a) was violated by the
scheme’s implicit anonymity. The Court was also asked to decide whether the plan affected the constitutional guarantee of free and fair elections and if whether the donors’ privacy could be used as a justification to restrict political funding transparency. The petitioners submitted that political donations are not only private transactions but also matters of public importance. The petitioners further submitted that citizens have a constitutional right to know the sources of political donations, since money has a direct bearing on governance. The petitioners also submitted that the anonymity of political
donations enabled quid pro quo arrangements and reduced accountability in elections. Finally, the petitioners submitted that the relaxation of corporate contribution ceilings may result in the unbridled influence of corporate entities on political parties, thereby undermining electoral equality. The Union of India supported the scheme as an electoral reform policy aimed at reducing
unaccounted cash donations. The Union of India submitted that the anonymity of political donations protected individuals and corporate entities from political retaliation, thereby encouraging political donations. The State also submitted that electoral finance policy is a legislative issue, and the judiciary must exercise restraint in reviewing economic and political decisions unless there was a violation of the Constitution. The Supreme Court declared that the Electoral Bond Scheme unconstitutional by a unanimous verdict, And the Court held that the right to freedom of speech and expression
under Article 19(1)(a) of the Indian Constitution encompasses the citizen’s right to information necessary for making an informed electoral decision/choice. The transparency of political funding was held to be an essential part of democratic participation and free elections. The anonymity of political donations could not prevail over the said constitutional mandate, especially when less restrictive methods of protecting donors were available. Thus, the scheme was held to fail the test of proportionality. The Supreme Court ordered the immediate stoppage of the sale of electoral bonds. The Court also ordered the State Bank of
India to provide all details of the electoral bonds purchased and redeemed since April 2019 to the Election Commission of India, which was to publish the same. The Court directed the immediate cessation of the sale of electoral bonds. The Court also ordered the State Bank of India to furnish the Election Commission of India with the complete details of the electoral bonds sold and redeemed since April 2019. The Election Commission of India was also ordered to make the information public. The decision is a significant reaffirmation of constitutional democracy. The Court’s assertion of the transparency of political funding as a part of Article 19(1)(a) has significantly improved electoral accountability and dismantled institutionalised secrecy. However, the decision also poses a number of questions on alternative frameworks for regulating political finance, such as how to address the issue of donor harassment. The decision is both a constitutional correction and a wake-up call for legislative reform in the regulation of campaign finance. The most important implication of the Supreme Court’s ruling in the case of Association for Democratic Reforms vs. Union of India (2024) is that it shows that the Supreme Court is conscious of the fact that political finance is not a matter of mere administrative significancebut is a very important part of democratic politics. The Court’s rationale begins with the recognition of the fact that elections cannot be reduced to the mere act of voting; instead, democratic engagement with elections must necessarily involve an informed citizenry that is able to assess the forces that shape political power. In this context, the Court’s holding that the voter’s right to information about political funding is guaranteed by Article 19(1)(a) of the Constitution is a balancing act between the proposition that the freedom of speech and expression in a constitutional democracy is not merely the right to express one’s political will but also the right to have access to information that is necessary for the formulation of that will. In this context, the Electoral Bond Scheme was held to be violative of the constitutional mandate of transparency in political funding, which allows money power to play in the background. One of the most compelling elements of the Court’s argument is its emphasis on the structural risks associated with anonymous and unlimited political contributions, especially from corporate entities. The removal of the previous requirements of disclosure and contribution limits effectively created a situation in which a potentially disproportionate level of influence could be exerted by those financial contributors whose support might be realized in terms of policy or governmental favour. Although the system was designed to restrict the transfer of cash payments of donations and shield the contributors from political reprisal, the Court asserted that it could not be justified on the premise that the privacy rights of the contributors were of greater significance than the right to information. On the principle of proportionality, the Bench indicated that although the protection of the contributors was a valid objective, the constitutional provision was not proportionate because a less restrictive method could be used to attain the same objective without completely destroying transparency. This decision is significant because it is consistent with a proper doctrinal principle that the integrity of democratic competition should not be compromised by informational restrictions framed in general terms of confidentiality.
One of the most interesting features of the Court’s reasoning is its emphasis on the structural dangers of anonymous and unlimited political contributions, especially when they come from corporate sources. The abolition of pre-existing disclosure obligations and contribution ceilings opened the door to imbalanced influence by sources whose financial support might be converted into policy influence or government favouritism. While the system was justified as a means of limiting cash contributions and protecting donors from political reprisal, the Court has soundly rejected the contention that donor privacy might prevail over the people’s right to know. Using proportionality analysis, the Court held that while the protection of donors might represent a legitimate aim, the means adopted are constitutionally excessive, since more limited alternatives are available that would reach the same objective without completely destroying transparency. This decision thus represents a crucial doctrinal statement: limits on democratic information cannot be justified on the basis of general claims of confidentiality when they impact the integrity of electoral competition itself. The verdict has triggered a crucial debate on the extent of judicial activism in the regulation of political finance. While the Court clearly strikes down the absence of transparency in the applicable regime, it fails to offer a comprehensive alternative regulatory framework that could adequately tackle the root systemic problem of the financial politics. While transparency is clearly a sine qua non, it is not a panacea for the problems of corruption and the imbalances of electoral spending; it could even simply shift the financial flow to other avenues unless a radical overhaul of the electoral system is accomplished. Moreover, the decision betrays a hidden conflict between the right to privacy and the right to democratic accountability, which is bound to resurface in future debates on electoral management. The Electoral Bonds decision is clearly a major reaffirmation of constitutional democracy in that
it safeguards the voter’s right to know how their money is being spent in politics. It reiterates that the democratic legitimacy is not merely dependent on electoral processes but also on the transparency of the institutions that finance and underpin political power.
References:
1. Supreme Court of India, Association for Democratic Reforms & Anr. v. Union of
India & Ors., 2024 INSC 113, Judgment dated 15 February 2024. Available at:
https://www.scobserver.in/cases/association-for-democratic-reforms-electoral-bonds
case-background/
2. Supreme Court Observer, ‘Association for Democratic Reforms v Union of India:
Electoral Bonds Case Background’ (2024). Available at:
https://www.scobserver.in/cases/association-for-democratic-reforms-electoral-bonds
case-background/
3. Supreme Court Observer, ‘Electoral Bonds Constitution Bench Judgment Summary’
(15 February 2024). Available at: https://www.scobserver.in/reports/electoral-bonds
constitution-bench-judgement-summary/
4. Supreme Court Observer, ‘Supreme Court Strikes Down Electoral Bond Scheme as
Unconstitutional’ (Report, February 2024). Available at:
https://www.scobserver.in/reports/supreme-court-strikes-down-electoral-bond
scheme/
5. Election Commission of India, Disclosure of Electoral Bond Details Pursuant to
Supreme Court Directions (March 2024). Available at:
https://www.eci.gov.in/disclosure-of-electoral-bonds/
6. State Bank of India, Compliance Submission to the Election Commission on
Electoral Bonds Data (2024). Available through Supreme Court directions reported
at: https://www.scobserver.in/reports/sbi-submits-electoral-bonds-data-to-eci/
