Over the two years since it became operational, the National Rural Employment Guarantee Act (NREGA) of 2005 has had a positive impact on the lives of millions of people across the poorest districts in the country. The Act, which guarantees 100 days of employment per household at minimum wage, is the first piece of legislation that compels the state to provide a social safety net for impoverished rural households. Till March 31, 2008, the Scheme had covered 330 districts across different States. From April 1, 2008, it has covered the entire country. NREGA has provided wage security for poor rural families, aided economic emancipation of women, and created public assets. Perhaps the most remarkable feature of NREGA, making a decisive break with the past is the complete ban on contractors. Ever since independence, most government programmes in rural areas have been implemented through the agency of local contractors, who have emerged as major agents of exploitation of the rural poor, especially women. They have run roughshod over basic human rights, paid workers a pittance and used labour-displacing machinery. NREGA bans the use of such machinery, mandates payment of statutory minimum wages and provides various legal entitlements to workers. It visualises the involvement of local people at every stage