The state in its efforts to meet the needs of the poor has four major functions of governance - developmental, empowermental, protective and disciplinary. This paper, based on fieldwork across the rural areas in three states, probes the Employment Assurance Scheme to understand the state's performance on these parameters as well as aspects of participation, governance and political society. What is revealed is the complexity and divergence of state action - conflicts within and between different agencies of the state, as also the challenges posed to these agencies by civil and political society groups. Also clear is that the participation of the poor in development programmes cannot easily be stepped up in the absence of supporting actors in political society. Part I of the paper presents the initial findings as they relate to the development and empowerment functions of the state. Part II, to be published next week, will develop the argument further through discussion of an 'action research' project that followed on from the authors' 'academic' research.