Social protection should ideally create a framework of 'welfare rights' for the vulnerable individuals and households. The state, through a set of policies of promotive and protective measures, sets out to achieve this. However, gaining these welfare rights in a decentralised democratic framework could be a function of the bargaining power that each individual, household and social group may possess. Therefore the micro-level interactions involving claimant, bureaucrat and local elites constitute the key policy process. Study of the process itself can reveal why some households gain formal social protection and other fail. This study argues that the local practices and informal rules underlying these public policy processes are purposively guided by the private interests of the local elites. At the heart of this dissertation is a comparative case-study of two villages in the Indian state of Maharashtra, based on eight months ethnographic fieldwork. Bottomup evaluation of two social protection programmes, public works (promotive) and social assistance (protective) programmes shows that 60 per cent of eligible persons are excluded from welfare rights. The mechanisms of exclusion and inclusion in these programmes are studied. The study reveals that both eligibility and entitlement to 'welfare rights' are contested within the power structure of the local community. The social identity of the claimant, and the ability to build a relationship with the local leaders or labour market managers act as key routes to access welfare rights. The precedence of informal rules at the stage of implementation of social protection programmes reproduced the existing social and economic power structures. As a result, the welfare rights of individuals and households are affected by the competing forces in the non-state sectors. These non-state actors, through their network, were able to weaken the administration and fair allocation of welfare benefits. Through this analysis the thesis contributes to the understanding of the local state, and decision-making practices over welfare rights in a decentralised context.