The study was conducted at Sagolkhong Watershed located in the Imphal west district of Manipur, India in the year 2018-19. A case study was done so as to analyze the impact of this watershed project on the income-employment and equity of the beneficiary households. For this, a two-stage-stratified random sampling method was used for the selection of three villages and 100 sample households from the Sagolkhong watershed using proportionate allocation random sampling technique. A preliminary survey preceded the actual survey by using well-prepared and pre-tested personal interview schedule so as to gain a firsthand knowledge of the various existing resources and other socio-economic features too. The primary objective of the study was to assess the employment, income generation and equity level of the project beneficiaries. Both conventional and mathematical tools were used for the analysis of the sample households. Also, the Gini concentration ratio & Lorentz curve for income distribution and equity were used for the analysis of the data. Due to the intensification of cropping pattern, adoption of various conservative measures and introduction of livestock sector, the sample households were provided ample room for giving employment. So, the per family employment level has significantly increased to 24 per cent. Hence, per hectare and per worker employment level have reduced to 1.5 and 3.7 per cent respectively after the project. With these, the average annual income of the beneficiaries households from both the farm and off-farm has significantly increased from Rs. 30050.61 to Rs. 41149 i.e. an increased of 36 per cent. This increased income has not been dispersed to the upper section of the community i.e., not to the richer fellows but also somewhat distributes among the weaker and poorer section too and particularly to the medium income group However, the increased income has not been evenly distributed to the marginal and landless farmers and is indicated by the Gini-Concentration ratio and Lorentz curve. The Gini- Concentration ratio before and after the project were found to be 0.38 to 0.36 respectively.