Water budget under deficit rainfall years was conducted at Babhulgaon micro watershed, Parbhani district of Maharashtra state considering crop water demand, human and livestock consumption. On the main streams, there were nala bunds and farm ponds constructed for rainwater harvesting and supplemental/protective irrigation. During the year 2014, a total rainfall of 398.1 mm was received, which was 52% deficit than average normal rainfall. The major losses were occurred as soil evaporation and transpiration are 59.71 mm and 155.26 mm, respectively. The surface runoff of 29.87 mm (11%) was estimated and the soil moisture of 103.50 mm was utilized for crop growth and which was found to be insufficient for normal crop growth, thus effected the crop yields. The crop water requirements of kharif and rabi season were 339.45 and 70.10 ha-m, respectively. The total crop water requirement of the year 2014 was 409.55 ham. During 2015, an amount of 407.8 mm of rainfall received which was 51% deficit to average normal monsoon rainfall. The major losses observed were due to soil evaporation and transpiration as 61.94 mm and 161.61 mm respectively. In 2015, rainfall was well distributed and only two storms were observed in the month of September resulted in a surface runoff of 18 mm which was 4.42% of rainfall. The ground water recharge contribution was 52.36 mm (12.84% of rainfall). The soil moisture storage of 107.77 mm was observed and found to be insufficient for crop growth. The crop water requirement of kharif and rabi season was 337.55 and 81.00 ha-mm, respectively. The total crop water requirement of the year 2015 was 418.55 hamm. The outflow characteristics indicated that there is additional possibility for construction of rainwater harvesting structures like nala bunds, earthen dams and farm ponds etc., because total available water storage capacity in all existing structures is about 21 to 35% of annual runoff only. The deficiency of water resources in the Babhulgaon micro watershed can be managed by harvesting the available potential runoff and its efficient utilization through modified cropping pattern.