Displacement of human populations from the natural habitats results in a host of socio-economic impacts. This study will focus on mainly farmers and tribal communities in India and how the modernisation process has affected these communities especially since the adoption of neoliberal economic reforms. For the rural people the displacement is a traumatic both in terms livelihoods and cultural point of view. The paper will analyse the issues of displacement of the villages that have been relatively isolated from the outside world. The development induced displacement becomes important due to its impact on the rural communities through land alienation in the form of protests by the affected communities. I find that not even a single study shows the socio-economic and environmental effects of these policies on the rural poor. Analysis of the reasons for these changes point in many directions. Displacement, the loss of traditional livelihoods of the rural communities and environmental destruction are the most prominent among them.