Initially when the scheme was launched wayback in 1993-94, the Central allocation of Rs.600 crore was made under it. The following year i.e. in 1994-95 the provision was doubled to Rs. 1,200 crore. In 1995-96, the allocation was further raised to Rs.1,700 crore. Since then more and more funds have been allocated for the scheme. In 1999-2000 a massive allocation of Rs.2,040 crore was provided for EAS. In the on-going year 2000-2001 an amount of the order of Rs.1,300 crore has been earmarked for the purpose. The year-wise allocation of funds have not increased proportionate to its expansion/coverage of Blocks/Districts.

    EAS envisaged that to provide employment during the period of acute shortage of wage employment to those who are living below the poverty line and are in need of it and are seeking employment. However, to provide assured employment to all the needy persons living below poverty line in rural areas was to be achieved through a combination of Plan and non-Plan schemes of all other Departments/Ministries of the Government of India and State/UT Governments as well as EAS.

    It was felt that since the funds provided under EAS are limited, these should be distributed among the States and the UTs in some rational manner so that the needy areas where the problem of labour exodus was endemic and agricultural production was low, were not left out.

    Based on the experience of last five years of implementation of the EAS, the programme has been restructured from the current financial year. While the basic parameters of the scheme have been retained, the demand driven nature of the scheme has been changed to allocation basis and it was decided to distribute the funds among the States/UTs on the basis of poverty ratio w.e.f. April 01, 1999.

    This change was recommended by the Group of Ministers in its meeting held on December 19, 1998, and decided that from April 01, 1999, the Scheme would evolve a specific allocation of each State. It was also decided that EAS would continue as the single wage employment Programme to be implemented at the District/Block level throughout the country. The funds would be provided to the States/Uts on allocation basis and also to the Districts on an index of agriculture backwardness evolved at the Centre. Under the project 70 per cent of the funds flowing to the Districts would be allocated to the Block Samitis and 30 per cent reserved at district level to be utilised in areas of distress. The selection of works would be decided by Zilla Parishads after consultation with MPs of that area. Funds would flow to DRDA/Zilla Parishad and would be lapsed if not utilised with permission to carry forward only 15 per cent as opening balance in the following year.

    The Cabinet, in its meeting held on March 16, 1999, approved the recommendations of the Group of Ministers and directed the Ministry of Rural Development to finalise the Scheme, in consultation with Planning Commission and Ministry of Finance. Accordingly, an Inter-Ministerial Committee was constituted under the Chairmanship of Prof. S.R. Hashim, Member, Planning Commission, which gave its Report in June, 1999. Based on this, the Scheme was finalised in a meeting on July 12, 1999. In finalising the Scheme, the announcements made by the Finance Minister, in his Budget Speech, were also taken into consideration. Based on this decision, the detailed revised guidelines were prepared and finalised and circulated on November 09, 1999. Some of the important features of the revised EAS guidelines are as follows:

    The Employment Assurance Scheme will be the single wage employment. It will continue to be implemented universally in all the rural Panchayat Samitis of the country. The Central assistance would now be allocated to the States/Union Territories on the basis of proportion of rural poor in a State to the total rural poor in the country. From out of the State allocation, funds to the Districts are provided based on an index of backwardness. Two indicators are used for working out the index of backwardness, namely, the proportion of SC/ST population of the district and the inverse of agricultural production per agricultural worker. Equal weightage is given to both these indicators.

    Of the total allocation, 70 per cent of Central funds released to the Districts would be allocated to the Panchayat Samitis and the remaining 30 per cent will be reserved at the district level, to be utilised in the area of distress. Zilla Parishads would be the implementation authority for the funds released to both Zilla parishads and panchayat samitis. Zilla Parishads would have the overall responsibility for finalisation of works, coordination among the other Line Departments and implementation of the works in the rural areas. The Watershed projects earlier being implemented under EAS have now been taken out of EAS and integrated into a single combined Watershed Development Programme.

    During 1999-2000, Central allocation for the scheme was Rs. 2,040 crore, which was released in two instalments. The Central allocation during 2000-2001 is Rs. 1,300 crores. It does not include watershed works and construction of rural roads. For these two activities, funds have been provided separately. The scheme has proved to be very useful for the rural poor and that explains why there is a demand from States and Union Territories for enhancing funds under the scheme.