Employment Guarantee Scheme for rural development a model of Maharashtra (India) a lesson for developing Countries

The Employment Guarantee Scheme (EGS) of Maharashtra state (India) may be taken as a model of a public works programme. It guarantees employment to the entire rural household willing to do manual unskilled work at minimum wages. If employment cannot be provided the Government is obliged to make payment of unemployment allowance to unemployed persons per day. Moreover this scheme is non-inflationary in nature as all the projects under it are financed out of taxation and State Government contribute to the EGS fund. Recently purchasing power has been transferred from the urban rich (professional taxes, etc.) to the rural poor. The assets created under the scheme are productive and longer lasting leading to the generation of rural employment and income flows in the future, i.e. for rural development.