Poverty in India is a great social and more challenging problem. The process of economic development had made the rich richer while the poor have become poorer. Today, most of Indian population lives below poverty line and is unable to fulfill its basic need of food, clothes and shelter. Swarnajayanti Gram Swarozgar Yojana is a very important tool for combating unemployment and underemployment in the rural areas and for attacking rural mass poverty and raising the rural poor above the poverty line. The present study was conducted during 2009-10 in Morar block of Gwalior district Madhya Pradesh. The total sample for this study consisted of 300 beneficiaries’ respondents. It may be stated that after the inclusion of respondents under SGSY programme they utilized the credit / loan in proper way for economic development and their annual income increased in significant way. Out of ten independent variables Caste and family type were found non-significant relationship with annual income. The coefficient of multiple determinations (R2) indicated that only 83.03 per cent of variation in the annual income increased of the respondents could be explained due to 10 independent variables. The highly significant “Fâ€ value reported the confirmation to the validity of R2 (0.8303) worked out with the variables identified for the study. The path coefficient analysis revealed that education exhibited highest positive direct effect on the annual income increased of the respondents. Complicated process in getting credit and the benefits of programme are not read to the needed people were the major constraints

Keyword: Swarnajayanti Gram Swaroz