SOCIAL CAPITAL :
Robert putnam, who have used the term social capital extensibly define it as ” whereas physical capital refers to physical objects and human capital refers to the properties of individuals, social capital refers to connections among individuals – social networks and the norms of reciprocity and trustworthiness that arise from them”, that is network of reciprocal social relations, based on mutual trust and accepted standard of social conduct. This network develops work culture of the society that pave the way for combined social efforts for economic progress and prosperity. Fukuyama who has underlined importance of social capital in his book “trust and the great depression” says that social capital is essential for modern economy to function efficiently.
Social capital is not just the sum of institutions which underpin society – it is glue that holds them together.
There are evidences in academic research which indicates that a state’s endowment of social capital does affect the ability of the state to reduce poverty and successfully implement devel programs. The social capital can contribute both towards poverty eradication as seen in Mohammus Yunus’s Grameen bank success in Bangladesh, can improve social stability as well as economic development.
RWAs, SHGs, cooperatives , charitable societies amd trust are key institutions that contribute to the devlopment of social capital in India. CSR has potential to be a big contributor in its contribution if corporates align their business operations with social values.
The concept of shared destiny must be infused in the society as a whole to generate a wave of social capital which can transform the country not only an economic powerhouse but also into an integrated, peaceful caring and giving society.
Contibution of SHG in building social capital in rural areas can be underlined. Group formation has significantly empowered women and mitigated their sufferings through interaction with each other. There are cases where shgs has helped in checking domestic violence, female infanticide, moving liquor shops outside of villages and a sense of pride and increased in prestige within family and in society as a whole. Also social capital has become the bankable collateral that has enabled increased access to financial services.
Trust creates social cohesion and gives meaning to and sustains a network of people. Social interaction that develops as a result of growing trust and hence growing social capital thus manifest as a relational dimension in personal relationship such as trustworthiness and respect. Noble laureate Kenneth Arrow wrote in 1972 that ” much of economic backwordness can be explained by lack of mutual confidence.” This statement reflects importance of trust and in turn of social capital.
Also in today’s era of social networking and information sharing through internet, individual’s level of social capital has increased manifold. They have provided platform for making virtual communities where individuals can selectively connect with others based on certain interests and background. Though some critics believed that it replaces strong bonds with online weak ties. This is also reducing interactions to only those who r of same ideology, race , gender or background and thus increasing gap among groups though increasing cohesion within group which may give rise to fragmented society.
If time permits, go through ninth report of second arc that deals with social capital.