A large number of children in India still work under highly exploitative working conditions. In spite of magnificent efforts, the problem of child labor has compounded into more complex issues intertwined with child trafficking, forced labor, missing children, and many other worst forms of childhood struggles. There is a general postulation that in reality the rehabilitation measures are not so effective. The phenomenon of the recycling of child labor divulges that the rescued children again join the workforce after a small gap either at the same place in the same city or at different places in different cities. The paper is aimed to study the realities of rehabilitation in order to understand intertwined issues relating to rehabilitation of rescued children from worksites as well as the present state of affairs. The paper has specifically explored the process of rescue challenges, the mechanisms devised and implemented for rehabilitation of these children, and the effectiveness of initiatives intended for reintegrating rescued children in societal mainstream. It discovered that the realities of rehabilitation are quite painful and a sad commentary on our efforts of rehabilitation. The compensation, back wages, or rehabilitation money has passes through different layers before reaching the rescued child. Once received, it is generally used for different purposes –such as buying animals, construction/repair of house, daughter’s marriage, and repaying to contractor who provided the employment. In some cases, cut/convenience money is also paid to the person responsible for releasing compensation. The time frame for receiving compensation/rehabilitation money varies from 6 to 36 months. As an estimate, approximately one-fifth of the rescued children never join school after rehabilitation because of poor economic conditions of their families, and many drop out to rejoining workforce. The paper has also explored various gaps in their rehabilitation and suggested recommendations for more efficient, effective, and efficacious rehabilitation of children freed from worksites.