The present article attempts to explore one of the most pertinent issues of livelihood among tribals in India. In this context, the following two key issues have been examined: (a) whether tribal people are still engaged primarily in agriculture or forestry related activities for their livelihood or they have moved to non-farm and industrial activities over the years and (b) whether the government affirmative action like reservation policy has helped the tribal people in joining more government/public/formal sector jobs. This article is based on analysis of last two decades secondary data from National Sample Surveys (NSS) and Census of India. On the basis of the analysis of the data it has been observed that the participation of tribals in public sector or formal sector jobs has increased over the years, which may be due to various affirmative actions by the governments’ reservation policy. However, the human capital base of tribals is still much below the other social groups. Another important fact has been revealed through probit regression analysis that the government reservation policy is exclusionary in effect. Maximum benefits have been derived by those who are highly educated and those who belong to high income group. These issues need urgent policy interventions for creating better livelihood conditions for the tribal population particularly for those who are relatively less benefitted which may need further investigation.