How Money Shapes Indian Elections
The relationship between money and political power in India is structural, persistent, and increasingly documented by court judgments, civil society analysis, and electoral data. The 2024 Lok Sabha election was projected to cost approximately ₹1.2 lakh crore (around $14 billion) in total campaign spending — making it the most expensive election in human history, surpassing even the United States presidential election in absolute terms. This figure includes spending by political parties, individual candidates, government advertising, media placement, and — crucially — unaccounted cash whose volume can only be estimated.
The Association for Democratic Reforms (ADR) calculates that 35% of party funds lack identifiable sources, and that an estimated ₹20,000 crore in unaccounted cash enters the electoral system annually. The Election Commission's own figures on election-time seizures — cash, liquor, drugs, gold, and freebies confiscated during campaigns — crossed ₹9,000 crore in the 2024 election.
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| Representational Image: How Money Shapes Indian Elections |
On February 15, 2024 — weeks before the 2024
election campaign began — the Supreme Court struck down the scheme unanimously
as unconstitutional, holding that it violated voters' right to information
under Article 19(1)(a) and that unlimited anonymous corporate donations
facilitated quid-pro-quo arrangements between corporations and the ruling
party. Subsequent SBI disclosures of donor data revealed patterns that civil
society characterised as extortion-adjacent: companies under ED or CBI
investigation purchased bonds shortly before investigations were closed or
penalties reduced.
The Ground Reality
- The
Supreme Court's February 15, 2024 judgment in Association for Democratic
Reforms v. Union of India struck down the Electoral Bonds Scheme as
unconstitutional; the Court held that it violated voters' right to
information, created scope for quid-pro-quo corruption, and that
"unlimited anonymous corporate donations" were "manifestly
arbitrary" given that corporations' "ability to influence the
electoral process through political contributions is much higher when
compared to that of an individual."
- SBI
data disclosed pursuant to the Supreme Court's order showed: ₹12,979 crore
in total bond sales; the BJP received approximately 57% (around ₹8,000+
crore); the TMC, Congress, BRS, BJD, and DMK received the remainder; 18
political parties received bonds compared to 31 parties that received
traditional donations.
- Humanities
and Social Sciences Communications research (Nature, December 2025)
identified four documented corruption patterns in the electoral bonds
data: corporations donating after receiving government contracts;
companies under ED/CBI investigation donating shortly before their
investigations closed; shell companies channelling illicit funds; and
extortion-style donation patterns where threatened companies made large
donations to the ruling party.
- ADR's
2024 analysis found that candidates with declared criminal cases had a
15.3% win rate in the 2024 Lok Sabha, compared to 4.4% for candidates
without criminal cases — a three-and-a-half-fold electoral advantage
attributable partly to the financial resources of candidates with
criminal-commercial networks.
- Official
candidate expenditure limits for Lok Sabha elections are ₹75–95 lakh
(depending on state population); the actual spending routinely exceeds
this by orders of magnitude — campaign advertising, travel, event
management, voter gifts, and indirect spending by parties are excluded
from the individual candidate's declared expenditure.
How It Works in Practice
1. Corporate-political nexus and quid-pro-quo: The
electoral bonds disclosure data — obtained through court order — documented
specific patterns: infrastructure, construction, mining, and pharmaceutical
companies were major donors; several companies under government investigation
donated shortly before investigations concluded; some companies donated amounts
that were multiples of their declared annual profits. The Supreme Court noted
this created "crony capitalism" risks that are "a threat to
India's democracy."
2. Cash as the primary political currency: Despite
formal channels including electoral bonds, cheque donations, and corporate
contributions, most campaign expenditure in India runs on cash: cash payments
to local workers, cash gifts to voters (rice, liquor, cash notes), cash hiring
of vehicles and equipment, and cash payments for rallies and events. This cash
economy is inherently opaque, evades all reporting requirements, and is
primarily supplied through the informal proceeds of business-political
networks.
3. Candidate wealth and electability: ADR analysis of
the 2024 Lok Sabha election found that approximately 21% of all candidates
possessed assets exceeding ₹100 crore. The correlation between wealth and
electability is strong: wealthy candidates can self-finance significant
campaign expenditure, fund party workers, and provide voter gifts that poorer
candidates cannot afford. This creates a structural barrier to entry for honest
candidates without existing wealth or access to political finance networks.
4. State funding debate: Multiple commissions — the
Indrajit Gupta Committee (1998), the Law Commission, and successive Election
Commission submissions — have recommended state funding of elections as a
mechanism for reducing private money's influence. No government has implemented
it; the electoral incentives for existing parties to do so are weak, since
incumbents already have advantage in fundraising.
5. Post-electoral bonds landscape: After the scheme's
invalidation, political funding has reverted to a combination of formal
donations (which must be disclosed above ₹20,000 threshold), corporate
contributions, and informal cash. The Heinrich Böll Stiftung analysis (May
2024) noted that no party had articulated a clear reform proposal for replacing
the bonds scheme; the reversion to the status quo ante means the pre-2017
system of partial disclosure and extensive informal funding.
What People Often Misunderstand
- The
electoral bonds scheme was introduced to reduce black money, not increase
it: The government's stated rationale for electoral bonds was
precisely that they provided a formal, banking-system channel for
donations that would otherwise be made in cash; critics argued (and the
Supreme Court agreed) that the anonymity feature negated this benefit.
- Campaign
finance limits apply to candidates, not to parties: The ₹75–95 lakh
limit applies to individual candidate expenditure; party spending on
advertising, star campaigners' travel, and national media is not included
in the candidate limit; total party spending has no effective cap.
- The
Electoral Bonds Scheme did not reveal donor identities to the public: Despite
SBI maintaining the data, it was disclosed to the public only under
Supreme Court order; the scheme was designed to give the government
selective access (through SBI, a government-owned bank) while keeping the
public uninformed.
- Not
all political funding is corrupt: Legitimate corporate donations
reflecting genuine policy preferences, individual citizen donations to
parties and candidates, and membership fees are normal features of
democratic party finance; the corruption problem lies in quid-pro-quo
arrangements and unlimited anonymous donations, not in political funding
as such.
- The
ADR data on criminal cases and wealth represents self-declared figures:
Candidates file affidavits of their assets and criminal cases; these are
self-declared with ECI verification; underreporting is documented and the
actual wealth and criminal connections of successful candidates may exceed
declared figures.
What Changes Over Time
The Supreme Court's February 2024 electoral bonds judgment
is the most significant development in Indian political finance in decades. Its
implementation through SBI disclosure has revealed documented
corporate-political nexus patterns that have entered the public record. The ECI
Chief appointment legislation (2023) that excluded the Chief Justice from the
appointment panel represents a separate governance development that affects the
institutional independence of the body charged with election integrity. In
April 2026, the 131st Constitutional Amendment on Lok Sabha seat expansion
failed to pass in the Lok Sabha — Frontline Magazine reporting indicates the
defeat marked "Modi's first 'No'". This once again showed the vibrancy of Indian democracy and Rule of Law as in it established the fact that even the
largest party in India's current Parliament cannot always legislate its
preferred constitutional changes without broader consensus.
Sources and Further Reading
- Stimson
Center — India's Electoral Bond Conundrum: https://www.stimson.org/2024/indias-electoral-bond-conundrum/
- Al
Jazeera — What are India's electoral bonds: https://www.aljazeera.com/news/2024/2/15/what-are-electoral-bonds-the-secret-donations-powering-modis-bjp
- Humanities
and Social Sciences Communications (Nature) — Electoral Bonds and
Corruption: https://www.nature.com/articles/s41599-025-06201-z
- Heinrich Böll Stiftung — How India's Politics is Funded and Why It Needs to Change: https://in.boell.org/en/2024/05/22/how-indias-politics-funded-and-why-it-needs-change
- ADR — Criminalization of Politics in India: https://adrindia.org/content/criminalization-of-politics-in-india-undermining-spirit-of-democracy