The COVID-19 pandemic exposed millions of unorganized migrant workers in India to severe economic vulnerabilities, including work instability and identity erosion. This case study examines the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) as a vital safety net for reverse migrants during 2019–2021, addressing rural employment challenges and fostering sustainable livelihoods. Using a mixed-methods approach, the study analyzes secondary data from government sources and interviews with 20 displaced migrant workers who benefited from MGNREGA. Findings reveal that MGNREGA absorbed surplus rural labor, mitigated 20–80% of income losses, and contributed to rural development through natural resource management projects like water conservation, afforestation, and land development. These efforts enhanced food security, water availability, and agricultural sustainability while empowering women through increased participation. Despite its successes, challenges remain, including delays in wage payments, inadequate funding, and technological barriers. The study underscores the need for improved program governance, increased financial allocations, and convergence with other rural initiatives to amplify MGNREGA’s impact. By integrating employment generation with rural development goals, MGNREGA emerged as a critical tool for poverty reduction and inclusive economic recovery, aligning with India’s Sustainable Development Goals (SDGs).