Electoral Bonds Scheme & Supreme Court Verdict: Political Funding in India

The question reads: "Consider the following statements about the Electoral Bonds Scheme, as struck down by the Supreme Court in 2024."

You have heard about electoral bonds — donors buy them from SBI, give them to political parties, parties encash them, nobody knows who gave what to whom. For five years (2018-2024), this was the primary channel for political funding in India. Then the Supreme Court struck it down unanimously in February 2024. The judgement is a landmark on the intersection of political funding, the right to information, and the architecture of electoral democracy in India.

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[TOPIC CLASSIFICATION]

• Topic type: Polity (Constitutional law, electoral reforms, political funding)
• PYQ frequency: High (expected to be a featured topic for 2025-2027 examinations given the landmark nature of the judgement)
• Exam stage: Prelims (scheme details, key dates, constitutional articles) + Mains GS-2 (polity: electoral reforms, transparency in political funding) + Essay
• Primary GS paper: GS-2 (Polity, Governance)

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[EXAMINER REASONING]

1. Primary trap. Candidates think electoral bonds were introduced by an Act of Parliament. They were not — they were introduced through the Finance Act 2017 (Money Bill route) by amending three laws: the Representation of the People Act 1951 (Section 29C — removing the need to declare donors), the Income Tax Act 1961 (Section 13A — exempting political parties from disclosing electoral bond donors), and the Companies Act 2013 (Section 182 — removing the 7.5% profit cap on corporate political donations). The use of the Money Bill route to pass these amendments was itself challenged.
2. Most confused. The distinction between what the Supreme Court struck down and what it did not. The Court struck down the anonymity provision — the mechanism that allowed donations without disclosing donor identity. It did NOT strike down electoral bonds as a financial instrument. It did NOT ban corporate donations to political parties. It restored the disclosure requirement under Section 29C of the RP Act.
3. Key anchor. The five-judge Constitution Bench (February 15, 2024) unanimously held that anonymous political donations violate Article 19(1)(a) — the right to information — because voters have the right to know who is funding political parties. The Court applied the "informational right" framework from PUCL vs Union of India (2003, voter's right to know the criminal antecedents of candidates).
4. Current affairs hook. The judgement was followed by the SBI disclosure of electoral bond data (March 2024), which revealed that 56% of total bonds were purchased by companies, 40% by individuals, and the remaining by others. The top buyer: Future Gaming and Hotel Services (Meghalaya-based lottery company) — ₹1,368 crore. The ruling BJP and opposition Congress were the largest recipients. The State Bank of India initially sought extension of time to submit data and was pulled up by the Court.