Share of unknown income of national political parties India FY 2023, by type

In the financial year 2023, electoral bonds constituted over 82 percent of unknown sources of income of political parties followed by other sources like voluntary contributions and the sale of coupons.
In total, over 59 percent of the income of national political parties in India came from unknown sources. Unknown income is declared in the annual audit report but without giving a source of income for donations below 20,000 Indian rupees.

What are electoral bonds?

Electoral bonds were introduced as part of the Finance Bill 2017 as a measure to curb the influence of black money in Indian elections. Electoral bonds are interest-free banking instruments that a citizen of India or a body incorporated in India is eligible to purchase. It is used for making donations to any eligible political party in India. The bonds are available at certain branches of the State Bank of India and a donor with a KYC-compliant account can purchase the bond. Neither the bond purchaser nor the political party must disclose the donor's identity. Only registered political parties that secured at least one percent of votes in the general or state elections are eligible to receive donations through electoral bonds.

Implications of electoral bonds

The proponents of electoral bonds argue that they promote transparency by ensuring that political parties receive funding through legitimate banking channels. However, multiple petitions have been filed against electoral bonds, criticizing the provision of anonymity of the donors and the possibility of misuse of the bonds using shell companies. With the removal of the cap on corporate donations to political parties, unaccounted and unlimited amounts of money can be transferred to political parties.