Urban development projects, especially new city development through land transformation from rural to urban, lead to the displacement of rural households in developing countries like India. Earlier studies indicated that displacement and resettlement caused by any development project predominantly affect the income and occupations of the resettlers. This article aims to comprehend the impacts of displacement and resettlement caused by a new city development, Nava Raipur Atal Nagar, India. The study analyzes three scenarios of the affected households: (i) already displaced and resettled, (ii) economically displaced, and (iii) to-be displaced households. The dimensions of economic assets were identified from the literature review and reconnaissance surveys. Later, a household survey with systematic random sampling was conducted to interview 224 households (HH). Mann–Whitney U-tests were employed to compare different scenarios of the households by considering the to-be displaced households as a controlled sample group and the other two as an experimental group of samples. Findings from this research reveal that the development project has a significant impact (p < 0.01) only on economically displaced households if the source of income is agriculture. However, income from agriculture is the highest among the households that are yet to-be displaced. Further, this research identifies that while the displaced and resettled households rely more on self-employment, economically displaced households rely more on animal husbandry, showing a significant difference in income compared to others. Overall, the results indicate no significant change in the household’s economic condition, probably because of the adequate compensation. These analyses imply that households affected by urban development projects can benefit from a well-planned and well-funded resettlement program. Additional data is required in order to ascertain whether these opportunities will continue to be sustained over the longer term.