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The construction of large-scale infrastructure projects like dams can substantially alter local hydrological systems, prompting concerns about their impacts on river water levels and discharge. This study was undertaken in response to the compelling need to investigate and analyze the potential implications of water scarcity, particularly within the framework of the Bisalpur Dam located on the Banas River. This study uses non-parametric trend analysis tests - Mann-Kendall (MK) and Modified Mann-Kendall (MMK) for river discharge and water level trend analysis, and Sen's Slope and Pettit's test for detecting changes or trends. Significant shifts in these parameters were identified post-construction. From 1960 to 2011, the Dam's construction led to a marked decrease in peak discharge (MK/MMK statistics Zc = −3.24; Pc = 0.001), with a Sen's slope of −21.51 MCM/year. Before the Dam's construction, the peak discharge reached a maximum of 7680 MCM in 1981–82. The gauge station's water level significantly decreased (MK/MMK statistics Zc = −3.46; Pc = 0.001) at an annual rate of −0.035 m/year. This level, peaking at 201.59 m in 1981–82, declined from an average of 196.04 m–194.5 m post-construction. The findings underscore the extensive impact of dam construction on local hydrological parameters. These results hold significant implications for future infrastructure projects, emphasizing the critical need for comprehensive environmental impact assessments to be conducted before project implementation. This understanding can aid in designing interventions with reduced environmental impacts, leading to more sustainable infrastructure development.