Bundelkhand region of Central India is a hot spot of water scarcity, land degradation, poverty and poor socio-economic status. Impacts of integrated watershed development (IWD) interventions on water balance and different ecosystem services are analyzed in one of the selected watershed of 850 ha in Bundelkhand region. Improved soil, water and crop management interventions in Garhkundar-Dabar (GKD) watershed of Bundelkhand region in India enhanced ET to 64% as compared to 58% in untreated (control) watershed receiving 815 mm annual average rainfall. Reduced storm flow (21% vs. 34%) along with increased base flow (4.5% vs. 1.2%) and groundwater recharge (11% vs. 7%) of total rainfall received were recorded in treated watershed as compared to untreated control watershed. Economic Water productivity and total income increased from 2.5 to 5.0 INR m(-3) and 11,500 to 27,500 INR ha(-1) yr(-1) after implementing integrated watershed development interventions in GKD watershed, respectively. Moreover IWD interventions helped in reducing soil loss more than 50% compared to control watershed. The results demonstrated that integrated watershed management practices addressed issues of poverty in GM watershed. Benefit to cost ratio of project interventions was found three and pay back period within four years suggest economic feasibility to scale-up IWD interventions in Bundelkhend region. Scaling-up of integrated watershed management in drought prone rainfed areas with enabling policy and institutional support is expected to promote equity and livelihood along with strengthening various ecosystem services, however, region-specific analysis is needed to assess trade-offs for downstream areas along with onsite impact. (C) 2013 Elsevier B.V. All rights reserved.