Inadequate monsoon influences crop productivity in sub-mountainous areas such as Kandi zone, which is characterized as a rainfed area. The present study was conducted over the period of three years (2014–17, rabi season) in rainfed area of the Kandi zone in Punjab, India. Primary focus was on the enhancement of rabi crop productivity (mustard) through application of biologically active formulation of plant beneficial microbes, Piriformospora indica alone (Pi, T1) and Pi in combination with Azotobacter chroccocum WR 5 (Pi+Az, T2). Significant improvement in plant growth and gross yield production of mustard was observed in both the treatments with maximum yield in T2 (31.3%), followed by T1 (14.6%) as compared to control. Agro-morphological traits like root length, shoot length, number of siliqua and total biomass exhibited a similar trend with T2 having maximum result followed by T1 and control. Industrially important compounds such as Beta sitosterol was present in large amount with varying concentrations in T2 (58.6%), T1 (54.5%) and control (52.3%). This study also encouraged local farmers to gain interest in sustainable agriculture through organic farming especially for mustard cultivation and demand for our commercial bio-formulation in the area has increased in the past years.