During the 2nd phase, 12 women community leaders started taking leadership of JMS as co-conveners on a full-time basis, ushering in a leadership change. During this phase, with the prolonged drought in Raichur, there was massive outmigration to cities. Though with the short supply of labour, wages had gone up slightly, the net wage-days of work had drastically reduced. Big farmers had started employing machineries in the agricultural work which further displaced labour. However, during this phase, National Rural Employment Guarantee Scheme was launched in 2005-06, and Raichur was one of the 100 districts that was short-listed for piloting the scheme. JMS fully got involved in mobilising communities for this. Subsequently, in 2007, NREGS was enacted as a law entitling each household to 100 days of work. With the massive inflow of money to each Gram Panchayats (GP), the corruption in GPs and elected members skyrocketed who saw it as an opportunity to siphon off funds. Simlarly, the landlords who exerted substantial clout in the local politics and business, with the machineries that they had bought with the surplus, such as tractors, JCB machines saw it as an opportunity, to get their share of pie from the government funds. JMS had to simultaneously fight the corrupt officials, elected representatives and landlords who employed machinery to pocket the NREGA works. During this phase, JMS undertook (1) land-development of 58 small farmers in 4 villages (Kharabdinni, Jagir Pannur, Pothnal and Dothrabandi) – in collabortion with Sir Dorabji Tata Trust; (2) massive mobilisation of 5000 households for setting a model in NREGA implementation – in collabortion with Sir Dorabji Tata Trust; (3) Mobilising 1000 agricultural labourers for skilling them with production of value-added products such as vermi-compost and xxxxx to promote organic agriculture. It enhanced their livelihood skills and capacities. This was done in collaboration with Traidcraft which advocated for fair trade.