In urban informal economies, waste-pickers increasingly face threat to their livelihoods due to the rapid emergence of formal systems of waste collection and lack of adequate public policies for their welfare. In this context, the study explores livelihood conditions of domestic waste-pickers and their occupational and educational mobility in Chandigarh, which is often referred as one of most well-planned cities of India. Using a semi-structured schedule, a field-based survey of the waste-pickers brings out that waste-pickers are the migrant workers from adjoining states and work as waste-pickers mainly due to non-availability of alternative employment opportunities. Employment in waste-picking is characterized by informal service charge fixation purely through interaction between house-owners and waste-pickers, where their low bargaining power leads to a surprisingly low level of income with significant variations due to gender. Child labour, even though disguised, also tends to exist. The study reveals unsafe working conditions, awful health conditions and unpleasant living conditions of the waste-pickers along with trivial upward educational mobility and no upward occupational mobility. The analysis presents a classic case of failure of both market and state in delivering optimum economic welfare to waste-pickers even in case of well-planned and highly urbanized city such as Chandigarh of India and demands immediate public policy intervention.