The 61st round (2004-05) of the National Sample Survey showed that there was a turnaround in employment growth in rural India after a phase of jobless growth during the 1990s. Paradoxically, this employment growth occurred during a period of widespread distress in the agricultural sector with low productivity, price instability and stagnation leading to indebtedness. This paper reveals that employment growth in the rural areas was probably a response to the income crisis that is gripping farming. Under conditions of distress, when income levels fall below sustenance, then the normally non-working population is forced to enter the labour market to supplement household income. The decline of the agricultural sector has also probably created forced sectoral and regional mobility of the working population, with the non-working population complementing them.