The Analysis is done in Three regions of Andhra Pradesh i.e Telangana, Coastal and Rayalaseema. The data shows that Rural non-farm diversification has not gone beyond livestock rearing, which clearly points to the need for relocation of rural enterprises to other types of economic activities. The data clearly reveal a greater need to improve the educational (skilled and semi-skilled), financial and entrepreneurial abilities of the weaker sections of society in order to bring about a real qualitative change in their livelihoods and to further the cause of social justice. AP is also characterised with a highly backward manufacturing sector with modern industry accounting for only about 28.6 per cent among the entire manufacturing sector, within which agriculturally prosperous regions have not progressed beyond agro-based industrial development. Moreover, as the industrial distribution of enterprises is skewed towards trade and services over the vital manufacturing sector there is a greater need to promote Medium- and small-scale manufacturing enterprises to bring about a significant improvement in growth of the state’s economy.This study provides a number of lessons which can be applied across similar agro-climatic regions. Sustainable irrigation facilities along with equitable distribution of land, education and access to cheaper credit would not only ensure higher productivity in the agriculture sector but also promote the growth of non-farm employment in the long run. The sub-agro climatic regional analysis revealed that, although there can be growth of the non-farming sector in the hitherto backward regions through groundwater exploitation, mechanisation of agriculture, use of improved seeds and fertilisers, etc., there is a greater need to work towards other forms of sustainable irrigation facilities if those regions face irregular rainfall and if the current levels of groundwater exploitation are unsustainable. Furthermore, there is a need for more in-depth studies focusing on the qualitative aspects of the enterprises like sustainability of employment generated in the enterprises, improved work conditions and appropriate wage payments in order to evaluate the significance of the wider processes surrounding the non-farming sector.