During past some years the Ceramics industry of Pakistan has faced a serious downfall due to which not only the economy got affected but also the livelihoods of people associated with this industry affected at a very large scale. As livelihoods are the source of poverty alleviation. Sustainable livelihoods are largely based on human, natural, physical, social and financial capitals. In Pakistan the Kashi industry lies under the category of small and medium enterprises. In many countries people gain view that only industry which works for the uplift of the economy is large-scale enterprises. However as Pakistan is a developing nation and in our country unemployment rates are higher and also the economy is performing poorly therefore there is a dire need to put focus on small and medium enterprises of the country as these are the backbone of an economy. This study shed light on the factors which results in the downfall of our country’s ancient industry due to which unemployment occurs and lives of people belonging to this industry deprived. The researcher carry out qualitative research. For data collection in-depth interviews and participant observation techniques were used. The study revealed that many people were associated with this industry were not satisfied and also those who have no other opportunity prefer to get attached with this industry. Further many of people associated with Kashi industry want to leave as they were of view that this industry has no future. The results also depict that due to lack of concern of institutions and processes the industry faces crises. Supervisor:- Dr. Zulfiqar Ali