Intra-basin and inter-basin transfer of water have become a necessity in view of severe regional imbalances in availability of water and drought conditions in India. This paper addresses the fundamental issues of river basin management in a multi-objective framework with a unique case study of Narmada River Valley Development, and demonstrates that the socioeconomic needs of the people override the rest of the working objectives. In inter-state water allocation, even a non-riparian state is considered when looking at the needs of the people. This paper focuses on the Sardar Sarovar Project on the river Narmada and highlights its rehabilitation, environmental and social aspects, and concludes that the project is a lifeline for people in western India.