The study has evaluated the benefits and financial structure of the project in the village Johranpur, district Solan (Himachal Pradesh) where a project under the NATP on ‘Rainwater Management on Micro Watershed basis’ was undertaken in the year 2000. It has also studied the extent of employment generated by the project and has assessed the changes in the land-use pattern in the project area. The results have revealed that technology of diverting run-off from agricultural fields to renovated ponds and its recycling to the same area with peoples’ participation and other technological interventions could produce remarkable results and have tripled the net agricultural income. The project was implemented at an initial cost of 9.21 lakhs and farmers incurred additional annual cost on inputs ranging from Rs 4963 to Rs 6346 per hectare due to supplemental irrigation, increased cropping intensity and higher input-use. The benefit cost ratio has been found as 1.71 using a discount value of 10 per cent for the project-life of 10 years. The project has also helped in generating additional employment opportunities on casual as well as regular basis.