Social audit is a participatory concept and process that evaluates the performance and impact of government programs, policies, and schemes by involving the community directly affected by them. It is a tool for ensuring transparency and accountability by comparing official records with the actual ground realities. The word 'audit' is derived from the Latin word "audire," meaning 'to hear,' reflecting its core function of forcing governments to hear the people.
The concept's institutionalization in India originated from a grassroots struggle in the 1990s in Rajasthan, where the Mazdoor Kisan Shakti Sangathan (MKSS) fought to enforce minimum wages in public works programs and expose embezzlement by local elites. This movement, which pioneered the use of jan sunwais (public hearings), laid the foundation for the national campaign for the Right to Information.
The mechanism was formally institutionalized and made statutory with the enactment of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005. Section 17 of the MGNREGA mandates that the Gram Sabha shall conduct a social audit of all works executed under the scheme at least once every six months. The process involves a Social Audit Unit (SAU) pulling out official documentation, which is then verified against the community's experience, culminating in a public forum where findings are read out and implementing agency officials must respond. The Audit of Schemes Rules, 2011, developed by the Ministry of Rural Development in collaboration with the Comptroller and Auditor General (CAG) of India, further strengthened this mandate.
Social audit connects directly to the Constitution (73rd Amendment) Act, 1992, which empowered Gram Sabhas to conduct such audits. It is also closely linked to the Right to Information (RTI) Act, 2005, which provides citizens with the necessary access to government records to conduct an informed audit. The scope has expanded beyond MGNREGA to schemes like the National Food Security Act, 2013. A significant recent change is the Meghalaya Community Participation and Public Services Social Audit Act, 2017, which made Meghalaya the first state to legislate social audits across multiple social welfare schemes. Furthermore, the Securities and Exchange Board of India (SEBI) introduced regulations in 2022 pertaining to the Social Stock Exchange (SSE), which includes requirements for audited Social Impact Assessment reports for not-for-profit organizations registered with the SSE.