National Rural Employment Guarantee Act 2005 (NREGA) An Ecological Act        The National Rural Employment Guarantee Act (NREGA) 2005, was brought into force by the Union government in February 2006. It is the first nation wide employment scheme that guarantees employment legally to India’s rural population. Naturally, it has generated intense speculation and interest in terms of its interest and scope. The NREGA is being implemented in 200 most backward districts (recently extended to 130 districts) across 27 states in the country. With the recent expansion of the Act in the Union budget, 2007, the government plans to expand NREGA to all the districts of the country. It guarantees 100 days of unskilled jobs for rural household. NREGA aims at eradication of extreme poverty and at making villages self-sustaining through productive assets creation (such as water tanks and soil conservation works). This is meant to regenerate the rural natural resource base, which in turn will result in sustainable livelihoods for residents. The Act puts the three tier Panchayati Raj Institutions 9PRIs) at the helm of affairs- beginning with identifying the eligible households to planning the works to be undertaken. In the last one year of its operation, the Act on an average has provided 37.50 man-days of work to a job seeking household against the legal promise of 100 man days annually, according to a government assessment. Till February 2007, 1.64 households have been provided jobs but only 62 crores man days of work has been generated against 164 crores which should have been generated as per the provisions of NREGA. While the Act legally binds the state to provide 100 days of employment to every job-seeking household, states have not been able to provide jobs for the full tenure. The number of productive assets created in the last one year of NREGA is 279,000. Water conservation accounts for 52.7 per cent of the total works till December 2006. Seven states have not undertaken any work on water conservation. On the other hand, 10 states account for 91 per cent of total water conservation works under NREGA. This points to the fact that focus on water conservation is not uniform across the 27 states implementing NREGA. Flood control and drought proofing remain the two least preferred works. To make the Act participatory in nature, village panchayats are the nodal implementing bodies implementing 50 percent of the works. The Act mandates the Panchayats to prepare the village level plans based on local resources and needs. The District level Plan designed by the district panchayat is prepared on the basis of the linkages of assets to be created that will help in local development. This plan, which is for five years, intends to facilitate advance planning and to provide a development perspective for the district. NREGA has certainly come at a crucial time, when rural economy in the country is facing stress due to myopic policies. Many studies on rural economy point to the erosion of livelihoods in Indian villages as the main driver behind rural unemployment. Efforts to salvage the situation through numerous poverty alleviation schemes have not helped. Thus, the NREGA faces a two-pronged challenge: the immediate one of addressing the skyrocketing unemployment crisis in rural areas, and a longer-term one of contributing to village economy in a sustained manner. Effective implementation of the Act would require planning labour-intensive works for the needy poor on a continuous and sustained basis. These works must build the right kind of assets to promote development of local/regional economy. To ensure that the impact of the Act is sustainable and lasts over the longer term, these assets must be managed well and in an equitable way to generate benefits for the poor, as well as to promote pro-poor economic growth. In this context, the NREGA should be seen more as a livelihood-generating programme than a wage-earning scheme. It also offers a unique opportunity to turn around rural development. CSE has been monitoring the Act at policy and practice levels on its contributions to sustainable livelihood creation through ecological regeneration.