Our earlier wage employment programmes failed due to the common problems of ineffective targeting, leakages and poor quality asset creation, etc. Hence, while developing rules and guidelines for implementation of the National Rural Employment Guarantee Act 2005, more attention should be paid to the lessons we have learnt from past experiences. Because this act has the potential not only to strengthen social security in India, but also to strengthen community mobilisation, ensure better responsiveness of local governments to community needs and priorities, and most of all enhance governance outcomes. This article is an attempt to articulate some key design principles that can strengthen the effectiveness of the new act.