This paper discusses the recent development of an Indian tribal village which mainly depends on forest economy. Main focuses are laid on occupational structure, agricultural production under drought prone environment, forest use and development policy. The study village, Gadher is located in Guna District, northwestern part of Madhya Pradesh. This district is characterized as the drought prone area physically and the backward area from the economic point of view. 'This village is adjacent to the large dense forest named Gadher Reserved Forest where forest resources are relatively well conserved. National Highway No.3 (Agra-Bombay road) goes through the village and connects to Guna City at 10km distance. In 1990, household number of this village is 97 and population reaches 522 persons. 90% of the total households belong to tribal community, Sahariyas. The main results are summarized as follows. 1) The village economy depends on forest produce. Most of Sahariyas are engaged in fuelwood collection throughout the year. They transport woods on headloads by themselves and sell them to individual household in Guna door to door. It is to be noticed that the dependency on forest economy has been enforced in last two decades. This trend is explained mainly by two factors, firstly the growth of fuelwood demand due to the population increase in Guna City and secondly the decrease of employment in agriculture and other casual labours. Nowadays villagers confront with many difficulties in the fuelwood economy, for example, the enforcement of government regulation in forest use, the decrease of forest resources and the increasing shift of fuel consumption to liquid oil and gas in urban households. 2) The condition of agricultural production is fundamentally bad, because of the thin soil, the prominence of unirrigated land and the small size of landholdings. After the independence, agriculture showed a tendency of development by the government's assistance. However, in 1970's, agriculture turned to decline and in recent years,