Processes of globalization and neoliberal reforms of local governance in Indian cities have created distinct patterns by reshaping the physical and social landscapes of India’s cities, triggering contestations between the privileged and the dispossessed. This paper addresses the consequences for poor households of mega-urban renewal and infrastructure projects and the processes of displacement and resettlement in Ahmedabad, India. The findings indicate that the displaced poor households have been further impoverished in the course of current practices as a result of limited attention to the risk of impoverishment both in policy and in local government practices. Contrary to the state’s rhetoric of inclusive governance, the urban poor are completely excluded from planning for infrastructure development and resettlement processes, leading to a lack of understanding of their needs by the state and their subsequent impoverishment after resettlement.