Farmers in the rainfed districts of South India are faced with repeated drought conditions, which adversely affect their livelihoods, placing their survival at stake. In this chapter, we empirically assess the drought survival potential of such households in three drought-prone districts of Andhra Pradesh, and evaluate the roles of human, physical, social, financial, and natural capitals in determining their resilience to repeated droughts. The key findings indicate that within the human capital category, health is not considered relevant for future drought survival, whereas higher skills are considered important by the households. Further, level of education and number of earning members in the household positively influence perceived drought survival. In addition, reliance on government intervention programs such as the Mahatma Gandhi National Rural Employment Guarantee Scheme for drought survival is higher among households with better health; such households also show greater reliance on common property resources for their income, implying that households with better health are able to better access or utilize livelihood opportunities outside of farming. The study also finds that watershed programs may have contributed to increased inequality in these regions; when compared to untreated regions, watershed-treated areas show improved drought resilience in some regions while there is no improvement in others. Results also indicate that the perceived resilience of farmers seems to have improved in terms of financial and health indicators in the watershed-treated regions despite a decline in their net crop incomes. © 2015 Elsevier Inc. All rights reserved.