With increased demand for water and soil in this Anthropocene era, it is necessary to understand the water balance components and critical source areas of land degradation that lead to soil erosion in agricultural dominant river basins. Two medium-sized east-flowing rivers in India, namely Nagavali and Vamsadhara, play a significant role in supporting water supply and agriculture demands in parts of the Odisha districts of Kalahandi, Koraput and Rayagada, as well as the Andhra Pradesh districts of Srikakulam and Vizianagaram. Floods are more likely in these basins as a result of cyclones and low-pressure depressions in the Bay of Bengal. The water balance components and sediment yield of the Nagavali and Vamsadhara river basins were assessed using a semi-distributed soil and water assessment tool (SWAT) model in this study. The calibrated model performance revealed a high degree of consistency between observed and predicted monthly streamflow and sediment load. The water balance analysis of Nagavali and Vamsadhara river basins showed the evapotranspiration accounted for 63% of the average annual rainfall. SWAT simulated evapotranspiration showed a correlation of 0.78 with FLDAS data. The calibrated SWAT model showed that 26.5% and 49% of watershed area falling under high soil erosion class over Nagavali and Vamsadhara river basins, respectively. These sub watersheds require immediate attention to management practices to improve the soil and water conservation measures.