Syllabus
GS Paper 2 – Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.
GS Paper 3 – Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.
Context
Out of the 34 States and union territories only six have completed social audit of works done under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in more than 50% of gram panchayats.
Recent Statistics:
- Inefficiency in Recovering Misappropriated Funds in MGNREGA –
- The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has been grappling with the issue of misappropriation of funds.
- In the financial year 2023-24, an alarming amount of ₹11.5 crore was flagged for recovery. However, after implementing corrective measures, this figure was reduced to ₹9.5 crore.
- Despite these efforts, a paltry sum of ₹1.31 crore, which constitutes only 13.8% of the total amount, was recovered.
- Historical Trend of Low Recovery Rates –
- This is not an isolated incident. The recovery rates in the previous financial years also depict a similar pattern of inefficiency.
- In 2022-23, the recoverable amount was ₹86.2 crore, but only ₹18 crore (20.8% of the total) was recovered.
- Similarly, in 2021-22, out of ₹171 crore that was flagged, a mere ₹26 crore (15% of the total) was recovered.
- Implications of Low Recovery Rates –
- These consistently low recovery rates not only raise significant concerns about the scheme’s effectiveness in combating corruption but also jeopardize the credibility of the entire audit process.
- This could potentially undermine public trust in MGNREGA’s integrity and purpose.
Social Audit Mechanism:
- Social Audit: This refers to the evaluation and assessment of a programme or scheme, carried out with the active participation of the people. It involves comparing official records with the actual realities on the ground.
- Tool for Social Transformation: Social audit is a powerful instrument for social change, fostering community participation and holding the government accountable.
- Difference from Financial Audit: Unlike financial audits, which scrutinize financial records to assess an organization’s financial health, social audits focus on evaluating a program’s effectiveness in achieving its social goals. This is done by involving stakeholders in the process.
Importance of Social Auditing:
- Uncovering Malpractices: Social audit plays a crucial role in monitoring government activities, exposing irregularities and malpractices in the public sector, and eliminating corruption and leaks.
- Monitoring and Feedback: It assesses a company’s social and ethical impact and provides valuable feedback on its operations.
- Accountability and Transparency: Social audit bridges the trust gap between citizens and local governments by ensuring accountability and transparency in the operations of local government bodies.
- Participation: It encourages and enhances community participation in programme development. Social audit empowers the Gram Sabha, a fundamental unit of rural administration.
- Policy Design: By identifying real issues and articulating demands in a socially responsible and accountable manner, social audit serves as a foundation for policy design.
- Professionalism Enhancement: Social audit mandates Panchayats to maintain adequate records and reports of expenditures made with funding from the government and other sources, thereby enhancing professionalism in the public sector.
Challenges Associated with Social Audit:
- Non-compliance with Rules: In many states, Gram Panchayats are not obligated to provide Social Audit Units with records of work completion and expenditures. Additionally, Gram Sabhas are not given social audit reports in their local languages.
- Lack of Independence: Many governments do not follow the transparent selection process for the director of the Social Audit Units as stipulated in the guidelines. Several Social Audit Units lack sufficient staff to cover all panchayats even once a year.
- Non-institutionalization: Auditors, who are subject to implementing agencies, face resistance and intimidation. They often struggle to access original data for verification due to the lack of institutionalization of Social Audit by the government.
- Absence of Stringent Penalties: The absence of penalties or legal consequences for violating rules and guidelines renders Social Audit ineffective.
- Inadequate Knowledge: Members of the Gram Sabha are often unaware of their legal right to social audits due to lack of awareness.
- Lack of an Intelligent Information System: Government agencies depend on an ambiguous and imprecise system of referencing government accounts and reporting methods to monitor the progress of a scheme, making it difficult for auditors to assess, accelerate, decelerate, or implement corrective actions.
- No Incentive to Participate: People’s concerns about their livelihood result in a lack of participation in village activities.
Way forward:
- Formation of Citizens Groups: The establishment of citizens’ groups is crucial for holding the political administration and implementing agencies accountable. These groups should advocate for the enhancement of social auditing.
- Creation of an Expert Group: A team of social audit experts should be formed to guide the members of the social audit committee.
- Training Programmes: The development of training programmes on social auditing practices, such as conducting and writing reports and presenting at Gram Sabha, is essential.
- Civil Society Participation: Encourage individuals, including university students, to participate as Village Resource Persons. For instance, Jharkhand has established a formal system by inviting prominent members of civil society to join the Social Audit panel.
- Institutionalizing the System: To make the system of social audits an institutionalized structure that cannot be challenged by vested interests, it requires widespread support and encouragement from various authorities.
- Support for Implementing Agencies: Rules should be established that mandate implementing agencies to participate in the social audit process and act swiftly on the findings.
- Legally Sanctioned Results: State governments should establish specific rules to ensure that social audit results are legally sanctioned.
- Use of Management Information System (MIS): Utilizing MIS can streamline the planning, implementation, and feedback phases of a program’s life cycle by tracking specifics of schemes at all levels.
- Punitive Action for Non-compliance: The state government should take swift action to identify the responsible parties and to punish defective SAU employees as well as other ground-level auditors.
- Monitoring: The Ministry of Rural Development should observe the implementing agency’s response to the social audit findings. A quarterly meeting between SAU, the implementing agencies, and MoRD officials should be convened to monitor the action-taken reports.
- Increasing the Frequency: Each Gram Panchayat should conduct it once every six months.
- Role of Media: The media should aim to reach rural communities and raise awareness through specially crafted programmes that focus on matters of rural concern, particularly Gram Sabhas and their capacity for social audit.
Source: The Hindu
Practice Question
Elucidate the concept of “Social Audit”. Discuss the role and significance of social audit in the Indian context.