The Supreme Court’s decision last week declaring that the electoral bonds scheme is unconstitutional as it violates citizens’ right to information and may lead to quid pro quo arrangements between political parties and donors has come as a cause for cheer for India’s opposition parties.

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Electoral bonds have been a topic of much discussion and debate in the political landscape in recent years. But what exactly are electoral bonds and why are they so important?

In simple terms, electoral bonds are a financial instrument that allows individuals, companies, and organizations to donate money directly to political parties. These bonds were introduced in India in 2018 as a way to bring transparency and accountability to political funding.

One of the key features of electoral bonds is that they are anonymous, meaning that the identity of the donor is not disclosed to the public or even to the political party receiving the donation. This has raised concerns about their potential for misuse and influence peddling, as it is difficult to track where the money is coming from and whether it is being used for legitimate purposes.

Another issue with electoral bonds is that they can only be purchased from select branches of a few designated banks during specified periods, which has been criticized as being restrictive and exclusive. Critics argue that this process favors larger donors and limits the ability of smaller donors to contribute to the political process.

Despite these criticisms, electoral bonds have been defended by some as a way to promote transparency in political funding and reduce the reliance on cash donations, which are harder to track and regulate. Proponents argue that by channeling donations through official banking channels, electoral bonds can help prevent corruption and ensure that political parties are held accountable for their sources of funding.

Overall, the debate around electoral bonds continues to rage on, with supporters and critics both making valid points about their impact on the electoral process. As the use of electoral bonds becomes more widespread, it will be important for policymakers and the public to continue to monitor their effects and consider potential reforms to improve transparency and accountability in political funding.