The sustainable livelihoods approach is a perspective which promotes the importance of developing deep understanding about the way the poor and vulnerable lives their lives and the importance of policies and institutions in the choices they make regarding their livelihood. It helps formulate development activities that are people-centered; responsive and participatory; multilevel; conducted in partnership with the public and private sectors; and presents dynamic and sustainable qualities. With this approach towards development, the concept of ‘sustainable rural livelihoods (SRL)’ is increasingly central to the debate about rural development, poverty reduction and environmental management. Chambers and Conway (1992) have defined SRL as “A livelihood comprises the capabilities, assets and activities required for a means of living. A livelihood is sustainable when it can cope with and recover from stresses and shocks, and maintain or enhance its capabilities and assets both now and in the future, while not undermining the natural resource base.” Later in the year 2000, Ellis included the term ‘institutions’ and stated that “A livelihood comprises the assets, the activities and the access to these mediated by policies and institutions that together determine the living gained by the individual or household.” In development economics and the widely-used Sustainable Livelihoods Framework, these resources are typically categorized intofive key types of capital: 1.Natural Capital the natural resource stocks from which resource flows and services useful for livelihoods are derived. Examples: Land, soil, water, forests, air quality, and biodiversity.2. Social Capital the social resources upon which people draw in pursuit of their livelihood objectives. Examples: Networks, membership in formalized groups, relationships of trust, and access to wider institutions of society .3. Human Capital the skills, knowledge, ability to work, and good health that together enable people to pursue different livelihood strategies. Examples: Formal education, vocational training, physical health, and practical labor capacity.4. Physical Capital The basic infrastructure and producer goods needed to support livelihoods. Examples: Affordable transport, secure shelter, water supply and sanitation, access to information (communications), and tools/equipment.5. Financial Capital the financial resources that are available to people and provide them with different livelihood options. Examples: Savings, available credit/debt, regular remittances, pensions, and wages. Why are they important?- If we discuss about these importance then it is very importance for us because When vulnerable communities have access to a healthy balance of these assets, they are more resilient to external threats (like droughts or job losses) and can sustainably lift themselves out of poverty. Organizations like the Food and Agriculture Organization (FAO) use these resource categories to design policies that promote both environmental conservation and economic.