Rural non-farm economy, in recent times, is considered as an effectual strategy for decentralisation of economic activities to rural India. The Economic Census of India estimates that around 41.89 million rural people are employed in non-agricultural establishments which registered a growth rate of 4.56 per cent during 1998-2005. However, the sector has been contending with a number of factors like inadequate rural infrastructure, particularly roads, electricity and communication facilities, lack of sufficient skilled labour and adequate access to credit, information and training facilities etc. The present study investigates the strengths and weaknesses of the rural non-farm sector of India analysing the structure and growth of rural non-farm sector and its’ trends towards employment and income generation to arrive at certain inferences like formulation of possible approaches with a view to promote rural non-farm sector self-sustaining in the changing competitive environment.