Conversion of grassland into intensive agricultural production is the major thread for land degradation, which changes nutrient and carbon dynamics, land productivity, soil and environmental sustainability. To evaluate impact of land use changes (LUC), we did carbon fractions study and analysed different soil quality indicators by standard methods. We found that bulk density, particle density, electrical conductivity and available N were influenced by LUC whereas water holding capacity, available P and K were influenced by soil depths. Conversion from grassland to arable land resulted in total organic carbon decreasing by 59.04% followed by silvi-pasture (46.61%) and horti-pasture (29.65%) in the top 0-15 cm soil. Different carbon fractions i.e. total organic carbon (TOC), hot water soluble carbon (HWSC), particulate organic carbon (POC) and KMnO4 oxidizable carbon (KMnO4-C) were also significantly (P<0.05) decreased in arable land, horti-pasture and silvi-pasture as compared to the grassland. The carbon management index (CMI) was significantly (P<0.05) higher in surface soils of grassland (264), horti-pasture, silvi-pasture over the arable land. Similar trend was also recorded for soil quality index (SQI) across all LUC. Thus, perennial grass -based land uses like grassland. silvi-pasture and horti-pasture with sustainable management practices could be adopted for management/rehabilitation of soil and environmental sustainability and soil quality in the semi-arid Bundelkhand region of India.