Pakistan has one of the biggest irrigation system but still among those countries which are predicted to be hit by water scarcity hence has implications for sustainable agricultural development. One of the reasons of this poor management is excessive ground water usage without appropriate recharging. This study was conducted under Punjab Irrigation System Improvement Project (PISIP) to have an assessment of the socio-economic implications of canals lining completed under this project. The study was carried out in 4 districts i.e. Faisalabad, Sargodha, Bahawalnagar, and DG Khan of the Punjab province of Pakistan. Triangulated study took 446 respondents for quantitative and around 45 respondents for qualitative data collection. Findings of the study showed mixed opinion of the respondents. Most of the respondents were not happy with the planning, design and construction of the project as to them project did not identify domestic needs in terms of washing places for animals, theft control and garbage cleaning from the water. An important implication of the design was the negative impact on ground water recharging as canals were lined on beds and sideways with the non-porous material. A positive outcome was the increasing awareness level and concern of users about importance of ground water recharging. They also added that design did not identify the importance of bumps to control speed of water where users had to rely on indigenous methods by putting sand bags which created further problems. A lot of trees were cut for construction work and were not replanted. No significant productivity in major crops was seen before and after the lining of canals, however a positive outcome was the more organized and unified role of Water Users Associations in the areas which strengthen the socio-economic integration among the users. It is suggested that sideways lining of canals either without bed lining or lining with porous material should be considered in future with attention to domestic needs of the respective areas.