An electoral bond is a financial instrument for making donations to political parties. According to the Electoral Bond Scheme, 2018, it is a bond issued in the nature of a promissory note, which shall be bearer in character. A bearer instrument is one which does not carry the name of the buyer or payee, no ownership information is recorded and the holder of the instrument (i.e. political party) is presumed to be its owner.
The scheme allows individuals, who are citizens of India, and domestic companies to donate these bonds — issued in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore — to political parties of their choice. The Supreme Court of India on February 15, 2024, struck down the electoral bonds scheme for anonymous funding to political parties as “unconstitutional”.
The apex court itself may be pleased to strike down this opaque scheme.