Social Cost Benefit Analysis - A Study

‘Profit Maximisation’ is no more the any aim of business. It is being felt that business owners, the business should evolve a balance in the interests of employees, customers, suppliers, government and the general public. A business unit owes its very existence to the society by using the society’s resources as imputs and by selling the produced goods and services to the society. It is, therefore, necessary that a business should operate within the overall perameters determined by the society. The present study categorically analyses why social cost benefit analysis technique to be introduced, rationality and importance of social cost benefit analysis, indicators of cost benefit analysis and methodology for evaluating social cost and social benefit etc. The study attempts to show that social cost benefit analysis is very much important for evaluating a project whether it is sustainable or not. No business could be allowed to exist if it is detrimental to the interests of the society.  Finally the study comes to a conclusion that though social cost benefit analysis has been accepted as an important tool of investment analysis, it is not a precise technique because of its inherent difficulties. In India some companies in private and public sectors have started publishing social reports as supplementary information in the form of Social Income Statements and Social  Balance Sheet though there is no legal obligation on companies to do the same.