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This article looks into the instances of growing waterlogging, which is a negative externality of the developmental process (canal irrigation) that has affected the marginalised sections to a greater extent, who mostly depend on land for livelihood and self-sustenance. Land-use pattern has undergone a tremendous transformation due to irrigation development in terms of increase in fallow and culturable waste lands. Fertility of the land has considerably been reduced: agricultural production has gone down, animals and trees have been diminished, livelihood and employment opportunities have declined, largely affecting the Other Backward Castes and Scheduled Castes living in its lower catchments that have sub-marginal landholdings and are historically marginalised, thus leading to higher incidence of migration among the local inhabitants of the basin. The study recommends how integrated land and water development programmes at village level could improve land utilisation pattern. These changes would indirectly increase agricultural productivity, enhance livelihood of the farmers and the local communities by increasing employment and livelihood activities at village level. The employment scheme National Rural Employment Guarantee Scheme (NREGS) would be of crucial importance in managing water resources and enhancing land development simultaneously.