Horticulture can be promoted as a means of agro-diversification for the second green revolution in India, providing the much-needed impetus to the growth of agricultural sector, through increase in trade, income and employment. The Indian agriculture is diversifying towards production of high-value commodities along with the increasing role of smallholding farmers. In this paper, the economic feasibility of diversifying towards horticultural crops has been examined. The benefit-cost analysis has been done and a comparison of commodities of foodgrain and horticultural group has been presented to evaluate the feasibility of diversification. Supply constraints in terms of poor supply-chain management have been highlighted. The BCR of horticulture has been reported to be more than that of cereals. This implies that it is profitable and economically feasible to shift land from cereals to horticultural crops. It has been argued that the reason why the farmers still continue to cultivate the staple foodgrains is their demand for self-consumption. The study has cautioned that the re-allocation/ diversification of land should be done in a manner such that optimal output and income can be generated, keeping in mind the domestic demand, exports target and improvement in the economic conditions of farmers. The diversification plan for the horticultural sector needs to be identified as it offers an attractive option and a major source of pushing up growth of the agricultural sector. The paper has pointed out that the policy issues involved on the production, marketing and policy fronts can bring about the desired growth in the agricultural sector.