The girls and boys have been shifted to government-run homes for children.
At least 63 children belonging to Andhra Pradesh, Tamil Nadu, Bihar and Jharkhand have been rescued from a food products manufacturing unit in Mailardevpally area of Hyderabad.
The raid was carried out as a part of Operation Muskan by the State Commission for the protection of child rights, CID police, District Child Protection unit and Child line.
Cases have been booked against the management of Jaya Food Industries which manufactures sweets such as Chikky, Sonpapdi, Gulabjamun and Mysore Pak.
Children were found to be working in hazardous conditions and were paid weekly wages at the rate of Rs 180 per day for girls and Rs 250 for boys.
The girls and boys have been shifted to government-run homes for children.
"'Despite our appeal, the labour department did not become a part of this operation. Why are they turning a blind eye?" child rights activist Achyuta Rao asked.
''The factory owners should be booked under prevention of child labour act and also for child trafficking as the children have been brought in from other states to work virtually as bonded labour here," he added.