From the last many years, India is facing the worst ever crisis of water. Due to the rapid growth of population, urbanization and industrialization, the water availability has become scarce. The global environment is changing everyday due to the over exploitation of the nature by the humans. Water is the basic requirement of life, but due to the high human indulgence, this unique gift of God is depleting gradually. Government is not being able to supply the drinking water to its citizens due to the crumbling of water infrastructure. That is why the effective conservation, management and distribution of water is the biggest challenge we are presently facing. Water Scarcity is a stark reality for some but an abstract concept to many. The demand of safe drinking water can be met with the combined initiative and action, keeping in mind that it is a fundamental and serious issue. Water management policy can be strengthened with holistic and people centric approach and by developing the decision support system. Thus, the challenges posed by water scarcity can be solved by harnessing of non conventional water resources together with trans boundary cooperation along with a comprehensive and integrated water management policy including advanced management and conservation. Present paper is designed to provide a coherent assessment of the causes, affect and legislative safeguards of water pollution. This study is intended to improve the inadequacies in law and the extent of its compliance at a local level. It will not only help in finding ways and means to tackle the water scarcity, but it will also help in generating awareness amongst the common people about the ever increasing problem of water. It deals with the review of various options for sustainable water resource management in India.