Natural resources management is crucial for sustainable development of a region. It involves knowledge of natural resources, planning for sustainable use, and implementation at field level. A watershed is an area within a region with natural boundaries that are most appropriate for natural resources management. This paper emphasizes need for a watershed approach, provides a brief description of that approach taken by India, and presents an exercise in planning and aiding in decision-making for a case study watershed. Production Systems Planning (PSP) is an approach presented here that can be taken for achieving natural resource conservation for case study watershed. The proposed conservation measures are quite useful in harmonious development of region for food production. Key Words: Natural Resources Management, Sustainability, Sustainable Development, Watershed Management, Production Systems Planning (PSP) Introduction Man's interaction with nature is rapidly becoming more complex due to a multitude of activities that directly or indirectly cause a disturbance in natural system. The deeper interactions between human activities and natural ecosystems call for an interdisciplinary approach to natural resources management, while inputs from multiple disciplines need to be effectively utilized in achieving it. This prudent natural resources management will enable sustainable development of a region without losing resource base. Sustainable development essentially aims to reconcile conflicting objectives of economic development and improvement in human welfare, and ecological sustenance and functioning of ecosystems. The term sustainable development is defined by Brundtland Commission as the development that constitutes meeting needs of current generation without compromising ability of meeting needs of future generations (Brundtland, 1989). Sustainable development is now globally accepted as a supreme long-term goal of humanity (World Commission on Environment and Development, 1987). Sustainable utilization of natural resources is essential for sustainable development. It follows that sustainability of renewable natural resources in general and common property resources in particular assumes importance in both developed as well as developing countries because of finite capacity of resource base and increasing demand for its exploitation. The technical definition of term sustainability is given as, the ability of a natural resource system to produce a socially optimum level of output that is necessary to meet needs and aspirations of people dependent on system perpetually without any detrimental effects on resource system itself and physical environment, and with no imposition of significantly greater risks on future generations (Colchester as quoted by Singh, 1995). This might be comprehensive and deep rooted, but in other words, sustainability implies not only conserving natural resources but also maintaining ecological functions and supply of natural resource products, which are essential to livelihoods of local people. Sustainability in this sense is a dynamic concept that reflects changing levels of output corresponding with changing human needs and production technologies over time. Natural Resources Management Natural resources discussed here are broadly covered under land, water, and biomass (or vegetation). These three resources are crucial for production under various systems namely, agriculture, horticulture, silviculture, pisciculture, and animal husbandry. Management of these three major resources is crucial for making production in these systems sustainable and enhanced. Sustainability of these systems can be threatened due to disruption in linkages between these resources. This may assume various forms, for example, increased soil erosion resulting in nutrient loss rendering it unfit for use in case of land; soil water deficiency or excessiveness affecting its productivity and degradation in case of water resources; decline in vegetation density and diversity leading to reduction in soil and water conserving properties in case of biomass or vegetation resources, and so forth. …