Presentation SCBA

8/2/2019 Presentation SCBA

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DR. VIKAS GUPTA


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A business organisation is also a socialunit. It uses the societys resources andproduces goods and services for which

the society is the ultimate consumer.Thus, a business unit owes its veryexistence to the society. It is, therefore,

necessary that a business shouldoperate within the overall parametersdetermined by the society.


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Similarly, the society is also to see thatsuch business activities should beundertaken which are beneficial to the

society as a whole. Keeping thisobjective in view, the Governments, bothin free and controlled economies enactsuch appropriate legislation for

regulating growth and development ofbusiness which they consider necessaryin the overall national interest.


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The basic philosophy behind thisarrangement is that all sectors of theeconomy, public or private, small or big,

should work for the overall good of thesociety.


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The concept of social cost benefit is nowincreasingly applied to the private sectoralso. The private sector also uses the

resources of the society and, therefore,it has moral responsibility to undertakeonly such projects which are socially

desirable.


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It should, while analysing capitalexpenditure proposals, keep in view thesocial contribution aspect. In other

words, besides commercial viability ofthe project, it should also see theassociated cost and benefits to the

society.


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The concept of social cost benefit hasnow started taking practical shape. ThePlanning Commission has already

decided that in future the feasibilitystudies for the public sector projects willinclude an analysis of the social rate of

return.


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Measurement of social costbenefit

The following are some of the indicators/criteria which can be used for measuringthe social costs and benefits associated

with the projects. Employment potential

Capital output ratio

Value added per unit of capital

Savings in foreign exchange

Cost benefit ratio


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Social accounting

Social accounting is concerned with themeasurement and disclosure of costsand benefits to the social as a result of

operating activities of a businessenterprise. Thus, social accountingmeasures social costs and social

benefits as a result of business activitiesfor communication to various groupsboth within and outside the business.


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Objective of social accounting

Measurement of net social contribution:social accounting aims at identifying and

measuring the periodic net socialcontribution of a firm. This includes theaggregate of net benefits to the

companys employees, to thecommunity and to the general people.


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Balance between firms strategies andsocial priorities: social accounting helpsin determining whether the firms

strategies and polices are consistentwith the legitimate individual aspirationsand also with the overall priorities of the

community and the society.


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Communication of information: socialaccounting aims to make availableinformation of a firms goals, policies,

programme, contribution to social goalsetc. To all segments of the society.


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Reporting of social cost benefitinformation

Social statement approach: according to thisapproach, two statements are prepared (i)Social Income Statement and (ii) SocialBalance Sheet. The social income statementprovides information according to socialbenefits and costs to employees, localcommunity and the general public. Socialbalance sheet portrays social investment ofcapital nature (i.e., social assets) viz.Township, roads, buildings, hospitals, schools,clubs, etc. On the assets side and theorganisations equity and social equity on theliabilities side.


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Operating statement approach:according to this approach, a firmpresents only the positive and negative

aspects of social activities as a result ofbusiness operations. The positiveaspects are broadly termed as socialbenefits

while negative aspects aretermed as socialcosts.


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Narrative approach: in case of thisapproach, disclosure regarding socialcost and social benefits is made in a

narrative and not in a quantitative form.The firm generally highlights the positiveaspects of its social activities.

Goal oriented approach: according tothis approach, the firm prepares of itssocial and economic goals or objectives.


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Pictorial approach: social activitiesundertaken by an enterprise arepresented in the form of pictures. The

annual reports contain photographs ofschool, hospital, club, Public Parkestablished and/or maintained by thefirm.


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Examples

Social benefits to staff:

Medical facility

Training programme

Concessional transport, water supply Educational facilities for children of staff

members

Social costs to staff: Extra work put in by staff and officers for

drought relief


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Social benefits to community:

Environmental improvements

Generation of job opportunities

Municipal taxes


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Documents

Presentation SCBA