Journal of Agricultural Development and Policy Volume 25 No. 1 (2015): 67-77 Livelihood Diversification Scenario in Rural Punjab Arjinder Kaur * , M.S. Toor ** and Dharvinder Singh *** ABSTRACT The process of economic growth is channelized through providing employment opportunities to a large section of population as productive employment of people is a determinant of the income levels. The success of Green Revolution led to decline in poverty ratio in the state. But since 1990s, the role of primary sector in employment generation has been declining and that of other sectors is increasing. Overall, Worker Population Ratio (WPR) and Labour Force Participation Rate (LFPR) of rural male workforce has shown some increase in the last decade, but has declined for the female workers in rural areas. Unemployment rate of rural workforce has increased since 1999-2000. The micro level evidence has indicated a trend towards diversified employment pattern in villages with more and more people being engaged in non-farm occupations. The recent agricultural crisis in the state due to shrinking profit margins has led to the problem of depeasantisation in the rural areas and hence, the poor households are shifting towards non-farm sector in Punjab. Key words: Worker Population Ratio, Labor Force Participation Rate JEL Classification: J21, J43 * Associate Professor and ** Professor, Department of Economics and Sociology, Punjab Agricultural University, Ludhiana. *** Project Coordinator, Center for International Projects Trust, New Delhi. INTRODUCTION Economic growth of an economy has a high degree of correlation with its poverty alleviation programmes. The process is routed through providing employment opportunities to the large number of persons. Income levels are determined by the productive employment of people. Decent and productive employment has been considered as the best route to get away from poverty (Islam, 2001) or it can be described as the other way round of engaging the masses of a nation in gainful employment. Gainful employment is a natural and most acceptable technique of achieving objectives of development, social justice, balanced regional growth, poverty eradication and stability in a country. Land reforms combined with the rapid technological innovations have brought about important changes in the rural institutional structure in Punjab (Bhalla, 1995). Structural transformation has been witnessed in the economy of Punjab in terms of gross state domestic product (GSDP), but still dependence of rural population in general and rural labor in particular has remained high in