By 2030, India's urban population is expected to have swelled from 285 million to 575 million – an increase roughly equal to the US population.
That challenge has become more pressing than ever as poor Indians struggle to cope with rocketing food prices. As inflation here has climbed to 7 percent, prices of rice – a staple in India – have surged more than 20 percent.
The NREGS, launched in 2006, was introduced across half of India's 604 districts by the end of last year.
It gave employment to 30 million families for 43 days on average, according to official figures.
In January, an independent audit agency slammed the program, saying it had "significant deficiencies," from financial mismanagement to a lack of trained manpower.
One of the problems, say critics, is that 60 percent of the money has to be spent on unskilled labor.
This, they say, leaves too little cash for skilled labor or materials – making it impossible to create useful productive assets like roads, schools, or health clinics.
Some economists argue that along with the farm loan waiver, the scheme could widen India's large budget deficit and push up interest rates.
But by far the biggest criticism is that the NREGS too closely resembles the innumerable poverty-reduction programs of the past, in which huge sums of money bypassed the intended beneficiaries.
"The government has been doing schemes like this since the 1970s – and this one just collapses them all into one," says Surjit Bhalla, an economist.
"None of them has worked, and nor will this. If you want to help the poor, cash transfers are the only way," he says, referring to poverty alleviation programs that provide cash to families on the condition that they meet specified social goals.
But many believe that the NREGS is different from earlier schemes in important ways, and that, rather than scrapping the project, its implementation should be improved.
Reetika Khera, an economist and representative of the global Right to Food Campaign, says that the NREGS ensures greater transparency than earlier schemes.