Watershed management is being recognised as a suitable alternative intervention in managing natural resources inrain-fed agriculture ecosystem. This paper has analysed cropping pattern and cropping intensity, yield-gap against packageyield and applied cost concepts of majorcrops in watershed areas. In addition,livestock economics of milch animals is alsoanalysed to ascertain its contribution to the household income.The data were collected using baseline survey instruments.Cultivation of crops is found to be economically better viable and has shown net returns of ` 8547 acre-1 in green gram and` 11064 in case of hybrid maize when the paid up costs on all variable inputs along with interest on working capital andfamily labour are taken for analysis however, the results have indicated relatively low cropping intensity of 120.64 per centper year and in case of yield-gap analysis of a few major crops the gap is found to be in the range of 30-50 per cent acrossthree seasons. Livestock economics has shown reduced level of livestock population,however, there is an encouraging trendin income generation from livestock enterprise as the average income obtained is ` 50,923 per household per lactation acrossdifferent breed types. Highest income per lactation by households (HHs) is realised in case of cross breeds at rupees 65,930followed by buffalos at ` 55992. It implied that dairy enterprise has an adequate potential in the area as could be found thatas much as 35 per cent sample farmers adopted dairy enterprise.