Current water resources management practices in most developing countries result in unnecessarily high economic and environmental costs. The magnitude and consequences of such costs have spurred the emergence of a global consensus on principles for improving water resource management. India will face an acute scarcity of water by 2025, more than most nations in the developing world. There is compelling evidence that improved water resources policies can have major impacts. In a number of cases in developed and developing countries pricing and tariff combined with regulations have produced savings of 20% to 30% and more. Improving water management will require that developing countries address the major constraints that currently undermine the allocation and efficient use of their water resources. Experiences in both developing and developed countries, as presented in this article, showed that improved policies for conservation and reallocation can have major benefits. The concerned authorities should look for various alternatives such as rainwater harvesting, recycling of wastewater, reducing un-accounted water and other options. Rainwater harvesting should be made compulsory; wastewater reuse has to be made with dual water supply system for new layouts. As the suburbs in the city are increasing day by day, rainwater harvesting would be able to serve the city for much longer time.