The statement above by Mr Ramchandra, the former sarpanch of Nandur, who described himself as a ‘farmer’, a ‘businessman’ and a ‘politician’, provides anecdotal evidence of the diversified modes of generating livelihoods in rural India. In Rahatwade and Nandur, as in many parts of India, the processes of industrialisation have created new forms of economic diversification and significant class differentiations. This chapter is an attempt to examine the relations of production in the current phase of rural industrialisation, and to locate the middle class. Is rural India a capitalist economy, and if so, how many classes does it contain? These are important questions to have in mind when we talk about class formation in a Marxian tradition, but not very straightforward to answer. As we shall see, an overwhelming proportion of the rural population is still involved in some type of self-employment. However, despite the persistence of petty commodity production, there is a relatively high degree of capital accumulation, when the purpose of production is not solely the satisfaction of needs but the generation of profit, extracted from the labour power of others. In what follows, I first examine the dynamics of rural economic transformation over the past three decades, and then provide a classification of means of accumulation that exist in rural India.