Rural poverty and unemployment in India have grown in an unprecedented manner during the last few decades. There is a growing incidence of rural youth shifting from agriculture into unproductive activities, compounding this problem. In order to reverse this trend and to provide livelihood security to the rural unemployed, the government of India (GOI) enacted the National Rural Employment Guarantee Act (NREGA) 2 in 2005. The act provides for 100 days of guaranteed employment to every rural household in a fi nancial year for unskilled manual work. The Act, initially notifi ed in 200 districts, at present covers 625 districts (nearly all the districts in the country) and claims to have benefi ted some 5 crore poorest households in the year 2011-12. With the budget allocation of Rs. 11,300 crore in 2006-07 3 under the umbrella of the NREGA, this is probably the largest rights-based social protection initiative in the world (Farrington et al., 2007). As per Schedule I of the Act, the work under National Rural Employment Guarantee Scheme (NREGS) will be essentially the creation of sustainable rural assets.