Social audit as a term was used far back in 1950s. The term social audit means different to different people. To some it means revealing a company’s social performance in front of all, for some it is an internal assessment of how well a company has discharged it social obligations and to some others it is a systematic and comprehensive evaluation of an organization’s social performance as distinguished from its economic performance. Social audit is a systematic study and evaluation of an organisation’s social performance. It is concerned with the possible influence on the social quality of life instead of the economic quality of life. Social audit produces a report on the social performance of a business unit. Social Auditing can be used as a tool to provide critical inputs and to correctly assess the impact of government activities on the social well-being of the citizens, assess the social costs and measure the social benefits as an outcome of implementation of any programme. The performance of government departments is monitored through various mechanisms, in different states in India. However, these practices do not capture adequately the broader social, community and environmental benefits.