While water remains one of the most abundant resources on earth but less than 1 percent of the total supply is reliably available for human consumption. Drinking-water is certainly essential for human survival but water-related illnesses are the most common health threat in the developing world. An estimated 25 000 people die every day as a result of water-related diseases Human existence depends on water. Water interacts with solar energy to determine climate and it transforms and transports the physical and chemical substances necessary for all life on earth. Competition among agriculture, industry and cities for limited water supplies is already constraining development efforts in many countries including India. As populations expand and economies grow, the competition for limited supplies is most likely to intensify, resulting in potential conflict situation among water users in days to come. Despite shortages of water, its misuse is widespread, be it in small communities or large cities, farmers or industries, developing countries or industrialized economies every where the mismanagement of water resources is evident. Surface water quality is deteriorating in key basins from urban and industrial wastes. Agriculture is often unable to compete with cities and industries for water, as it is unable to pay more for water it needs. Further, irrigated agriculture is expected to produce much more in the future while using less water than it uses today. At present, 2.4 billion people depend on irrigated agriculture for jobs, food and income (some 55 percent of all wheat and rice output is irrigated). Over the next 30 years, an estimated 80 percent of the additional food supplies required to feed the world will depend on irrigation. Ministry of Water Resources, Government of India, in January 2012, released a draft National Water Policy for the consideration and opinion of state governments and other stakeholders. The need for a holistic national policy has its genesis in the changing patterns of water use across India – both personal and industrial use. This includes the imperatives of providing both clean drinking water and adequate resources for irrigation; the move to look at renewable sources of energy like hydro power; and natural disaster management and rehabilitation following devastating floods and drought. The policy also seeks to offer economic incentives and penalties to reduce pollution and wastage. For reversing the usual approach of projecting a future demand and bringing about a supply-side response to meet that demand, we must start from the fact that the availability of fresh water in nature is finite, and learn to manage our water needs within that availability. This means a restraint on the growth of 'demand' for water (other than basic needs) which will be difficult and will involve painful adjustments; but this has become inevitable. So, to have a more equitable and inclusive water resources management, the primacy has to shift from large, centralized, capital-intensive 'water resource development' (WRD) projects with big dams and reservoirs and canal systems, to small, decentralized, local, community-led, water-harvesting and watershed-development programmes, with the big projects being regarded as projects of the last resort; and the exploitation of groundwater will have to be severely restrained in the interest of resource-conservation as well as equity.