In order to reduce the level of poverty by providing job opportunities to the rural poor, the National Rural Employment Guarantee Scheme (NREGA) was introduced in 2005 under National Rural Employment Guarantee Act (NREGA), 2005. On 2nd October 2009, NREGA has been renamed as Mahatma Gandhi National Rural Employment Act (MGNREGA). The MGNREGA provides 100 days of guaranteed employment opportunity in a financial year to any rural household whose adult members are willing to do unskilled manual work at the statutory minimum wages prescribed by the government. It is an important step towards the realisation of the Right to Work. It is also expected to enhance people’s livelihoods on a sustainable basis by developing the economic and social infrastructure in rural areas. A social audit is a process by which the people, the final beneficiares of any scheme, programme, policy or law, are empowered to audit such scheme, programme, policy and law. A social audit is an ongoing process by which the potential beneficiaries and other stakeholders of an activity or project are involved from the planning to the monitoring and evaluation of that activity or project. It thereby tries to ensure that the activity or project is designed and implemented in a manner that is most suited for the prevailing local conditions, appropriately reflects the priorities and preferences of those affected by it, and most effectively serves the public interest.

This book discusses the evolution of the third tier of the Indian federal system, with a focus on rural local governance (commonly known as Panchayati Raj) against the backdrop of important theoretical and empirical literature on the relevance and effectiveness of service delivery in the decentralized system. It evaluates the quintessence of the functioning of the Panchayati Raj in the past two decades of its existence. This pioneering book also discusses the treatment of the third-tier government in the inter-governmental fiscal transfer framework and the delineation of the unique institution of local self-government in the Northeastern Indian States. In the light of the loosely evolved fiscal relations between three levels of government, it has been observed that local self-governments in the bottom tier have not been truly empowered yet. The book argues in favor of integrating the third-tier government into the Indian federal system and suggests how this could be achieved.