This paper tries to assess the changes in socio-economic conditions in downstream dewatered area from Kulekhani dam after inter-basin transfer of river water from Kulekhani basin to Rapti basin since 1982. After decline in crop productivity because of decline in irrigation particularly during winter season, livelihood options are affected. Downstream people are depending for water on different resources such as natural springs; tap etc. Traditional water mills are either non-functioning or its efficiency is declined due to decline in water availability. Out of 16, 9 water mills have been closed, remaining are hardly conducting. Almost 90% fishes have decreased and some species of fishes have disappeared from the river therefore, Fishermen who were economically dependent on fishing activities have forced to replace their traditional fishing occupation. People have felt new experiences such as temperature increased and appearance of mosquitoes. Upper reach has almost completely dried but lower reach has little water available in the river because of its tributaries thus upper reach is more effected than lower reach. The risk of artificial uncertain flood due to high dam may burst by natural or unnatural forces and during the period of opening dam gates due to overflow, as there are no enough early warning systems developed particularly at the time of opening the dam gates, the unexpected risk has increased in downstream area.
