Social Audit

2023 OCT 12

Mains   > Governance   >   Aspects of Good Governance   >   Citizen Participation


  • There is criticism that the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme’s social audit, an inbuilt mechanism to combat corruption and detect any cases of malpractice, has not been backed by the effective recovery of embezzled funds.


  • As per the statistics available with the Union Rural Development Ministry, in the ongoing financial year, the social audit units have flagged misappropriation to the tune of Rs.27.5 crore. After action was taken in some of these cases, the amount came down to Rs.9.5 crore, out of which only Rs.1.31 crore has been recovered so far, merely 13.8% of the total.
  • The figures for the previous financial years are equally dismal. In the financial year 2022–23, after taking rectifying measures, the recoverable amount was pegged at Rs.86.2 crore, but the recovery amounted to only Rs.18 crore, just 20.8% of the total. In FY 2021–22, social audit units flagged one of the highest amounts of misappropriation at Rs.171 crore, but only Rs.26 crore, 15% of the total, was recovered.


  • A social audit is a process by which the people (the final beneficiaries of any scheme, programme, policy or law), are empowered to audit such schemes, programmes, policies and laws.
  • Social audit is an accountability tool that measures, evaluates, identifies gaps in service delivery and elicits promises to rectify these gaps with the direct participation of intended beneficiaries in this process.
  • Social Audit is a powerful tool for social transformation, community participation and government accountability.


  • Transparency:
    • Complete transparency in the process of administration and decision making, with an obligation on the government to proactively give the people full access to all relevant information.
  • Participation:
    • A right based entitlement of all the affected persons and not just their representatives to participate in the process of decision making and validation.
  • Representative Participation:
    • In those cases where options are pre-determined out of necessity, the right of the affected persons to give informed consent, as a group or as individuals, as appropriate.
  • Accountability:
    • Immediate and public answerability of elected representatives and government functionaries, to all the concerned and affected people, on relevant actions or inactions.


  • In India, the initiative of conducting social audits was taken by Tata Iron and Steel Company Limited (TISCO), Jamshedpur in the year 1979.
  • Social audit gained significance after the 73rd amendment.
    • The approach paper to the 9th Five Year Plan (2002-07) emphasized upon social audit for effective functioning of Panchayat Raj institutions (PRIs) and empowered gram sabhas to conduct Social Audits in addition to its other functions.
  • National Rural Employment Guarantee Act, 2005 provides for regular “Social Audits” so as to ensure transparency and accountability in the scheme.
    • The State Government shall identify or establish, under the NREGS, an independent organization, Social Audit Unit (SAU), at the state level, to facilitate conduct of social audit by Gram Sabhas.


  • Promote transparency and accountability:
    • Social audit ensures accountability and transparency in working of local government bodies and reduces trust gap between people and local governments. 
    • It includes measures for enhancing transparency by enforcing the right to information in the planning and implementation of local development activities.
  • Promote peoples participation:
    • Social audit promotes participation of people in implementation of programmes and makes people more forthcoming for social development activities
  • Strengthen Gram Sabha:
    • Social audit gives voice and influencing power to the GramSabha, the lynchpin of rural governance structure.
    • It strengthens participation in Gram Sabha, make it an inclusive and participatory institution and make it a platform for positive collective action.
  • Deters corruption:
    • Social audit uncovers irregularities and malpractices in the government schemes / development projects and maintains oversight on government functioning, thus reducing leakages and corruption.
  • Educate people about their rights:
    • Inform and educate people about their rights and entitlements under the law in course of conducting Social Audit.
  • Collective platform:
    • Social audit provides a collective platform, such as Social Audit Gram Sabha for people to express their needs and grievances.
  • Improve capacity of the stake holders:
    • Improve capacity of local stake holders who participate in the Social Audit.
  • Monitoring and feedback:
    • Social audit monitors social and ethical impact of an organisation’s performance and provides feedback on the work.
  • Improves professionalism:
    • Social audit boosts professionalism in public bodies by forcing Panchayats to keep proper records and accounts of the spending made against the grants received from the government and other sources.


  • Rules not properly followed:
    • In many states Social Audit Units (SAUs) don’t seek record from Gram Panchayats regarding execution of works and expenditure (CAG report),social audit reports are either not prepared or not made available to gram sabha in local languages.
  • Lack of awareness:
    • Lack of awareness among Gram Sabha members and their rights on social audit.
  • Absence of stringent penalty:
    • Flouting of Social Audit principles and norms does not attract any penalty or legal proceeding which makes Social Audit a toothless exercise.
  • SAUs lack independence:
    • Some SAUs have to obtain sanction from the project implementation agency before spending funds.
    • Many states don’t follow the open process specified in the standards for the appointment of the SAU’s director.
    • Several SAUs do not have adequate staff to cover all the panchayats even once a year.
  • Lack of interest:
    • Lack of interest in people about the village activities due to their livelihood reasons.


  • More finances to SAUs:
    • In 2012, MoRD had recommended 1 per cent of the expenses under MGNREGS for SA, which got reduced to 0.5 per cent later.
  • Support of implementing agencies:
    • Rules must be framed so that implementation agencies are mandated to play a supportive role in the social audit process and take prompt action on the finding.
  • Increased frequency:
    • Social audits must be conducted in every Gram Panchayat once in every 6 months.
  • Punitive action against non-compliance:
    • State Government should promptly fix responsibility as well as take action against errant officials in SAUs and other ground level auditors.
  • Knowledge dissemination through regular meetings:
    • Meetings of gram sabha should be held regularly and members/villagers must be educated about their role in social audit process through these meetings by Programme Officers.

Best practice:

Andhra Pradesh:

  • Society for Social Audit, Accountability and Transparency, an autonomous body insulated from government interference, was set up in AndhraPradesh.
  • The state of Andhra Pradesh has become a role model for all the other states as far as implementation of SA is concerned. The main aim of the SSAAT is to uphold the concept of eternal vigilance by the people, facilitated by social activists and Government acting in conjunction.


Q. Describe the role of social audits in improving the efficiency of social sector schemes and development projects. Also, discuss the challenges associated with social audits in India.