ISAS Insights

The process and magnitude of electoral funding have come under severe public scrutiny in India. It is an acknowledged fact that elections entail a huge amount of monetary resources. Obviously, such large amounts cannot be raised through individual- or retail-donations. Corporate agencies are rumoured to be making sizeable donations to political parties. The nature of such funding is opaque. The public, therefore, desires that political parties disclose the sources of their funds and maintain transparency in their dealings. Seized of the matter, the Indian government has, in the current year’s budget, introduced an innovative proposal of electoral bonds which appears to be the first of its kind anywhere in the world. The announcement, which has received very diverse reactions, is certainly a step in the direction of attempting to cleanse electoral funding. The scheme for issuance of such bonds has not been announced as yet. It has to be seen how effective the bonds will be in introducing transparency.