Dispersive soils also known as sodic soils are highly susceptible to erosion; as they contain a high percentage of exchangeable sodium ions that makes the soil particles to disperse and segregate when posed with water. Many catastrophic damages and failures have been reported worldwide where these soils are encountered while undertaking any construction activities. In order to build sound and durable structures; suitable ground improvement methods have to be adopted to improve its strength properties. In the present study considering the sustainable environment and economical point of view industrial byproducts such as fly ash (FA) and red mud (RM) have been utilized to modify the properties of the soil. The soil is stabilized with fly ash at different percentages from 3 to 12. The unconfined compressive strength (UCS) of stabilized soil is found maximum with 9% addition of fly ash. The soil is further stabilized with optimum content of fly ash and red mud varied from 5 to 20% at an increment of 5%. The load-settlement characteristics of a square footing resting on stabilized soil is determined using PLAXIS 3D which were improved with the binder content for footing widths (1 m, 1.2 m and 1.5 m). The present investigation also reveals that the engineering properties of soil were significantly enhanced upon stabilizing with fly ash amended red mud (FARM) mixtures.