Electoral bonds are bearer bonds, introduced as a mechanism for individuals and companies to donate money to political parties in India in 2018 by the BJP government. They were introduced without consultation and ignoring objections of the Election Commission and the RBI. Electoral bonds worth Rs. 6,128 Crore were sold between March 2018 and October 2019, with about 95% going to the BJP.
There is evidence that Narendra Modi ordered rules about election bonds to be broken, and personally intervened to ensure that neither opposition parties nor the public were consulted about the bonds before their introduction.
Electoral bonds have been widely criticised for a variety of reasons.
• Transparency: they are highly opaque, making it possible for individuals and companies to donate large sums of money to political parties anonymously and untraceably. This problem was raised by the Election Commission before their introduction, but ignored. In a later court challenge to the scheme, the government argued that "It is not voter's concern to know where the money comes from".
• Advantaging the ruling party: although the public cannot find out who is funding political parties, the government can track electoral bonds. They thus introduce a new mechanism for corruption and potentially discourage donations to opposition parties.
• Political money laundering: they allow black money to flow to political parties through shell companies. (This objection was raised by the Election Commission.)
• An alternative currency: they have the potential to be used as an alternative currency and "undermine faith in banknotes issued by the central bank". (This objection was raised by the RBI.)
References:
• The electoral bonds controversy: All you need to know in 10 points on The News Minute.
• Explainer: What we now know about the BJP’s secretive electoral bonds scheme after a week of exposes on Scroll.
• Posts tagged electoral bonds on Narendra Modi Facts.