Option (C) is the correct answer because the question asks for the statement that is NOT an argument in favour of multi-purpose river projects. Options (A), (B), and (D) all highlight positive benefits of multi-purpose projects – providing water to scarce areas, controlling floods through regulation, and generating electricity. However, Option (C) states that these projects 'lead to large scale displacements and loss of livelihood,' which is a negative consequence and thus an argument AGAINST such projects, not in favour of them. The textbook context also mentions that multi-purpose projects and large dams have come under 'great scrutiny and opposition for a variety of reasons,' indicating negative impacts like displacement are arguments against these projects.