Farming is the main production activity in Palampur. However, non-farm production activities are also found there though at a small level.
(i) Dairy. Dairy is a common activity in many families of Palampur. People feed this buffaloes various kinds of grass and the jowar and bajra that grow during the rainy season. The milk is sold is Raiganj, the neary by village. There are collection cum chilling centres at Raiganj from where the milk is transported to far away towns and cities.
(ii) Small scale manufacturing. Less than fifty people are engaged in manufacturing in Palampur. Manufacturing in Palampur involves very simple production methods and are done on a small scale. They are carried out mostly at home or in the fields with the help of family labour.
(iii) Shopkeeping. Very few people are engaged in trade in Palampur. The traders are shopkeepers who buy various goods from wholesale markets in cities and sell them in the village. There are small general stores in the village where a variety of household articles such as rice, wheat, sugar, tooth paste etc. are sold. One can also find open small shops selling eatables.
(iv) Transport. People engaged in transport services are rickshawallahs, tongawallas, bus, jeep, tractor, truck drivers etc. They ferry people and goods from one place to another and in return get paid for it.