Water consumption in fast growing developing economies is increasing at a very fast rate. In countries such as India, operating in the third phase of demographic structure, high birth rate and low death rate, will soon face the problem of water shortage in next two-three decades. Out of seventeen sustainable development goals by United Nations, availability of clean and safe drinking water to all the rural areas of the world is a major topic. This paper analyzes the impact of water supply on economic growth of India. Water is a vast subject having different usage and consumption purposes. Therefore, in order to make the research work more subjective, only ‘drinking water’ has been taken as the main parameter. Since the demand and supply of water is different in urban and rural areas, analysis of the objective has been done separately for both the sectors. Consumption of water in rural area is majorly confined to irrigation purpose where as in urban areas it has high usage in domestic and industrial sector. The following paper highlights the demand and supply gap of water in rural and urban areas of the country. The analysis proves that firstly with increase in living standards and income, there is shift of population from rural to urban area. Secondly it shows that the supply of water is not sufficient for the growing population. As a result, this situation generates the need for adoption of sustainable measures for water conservation in the upcoming future. From empirical research and data analysis, it is significantly visible that the per- capita availability of annual water in India has declined by 70 percent from 1951 in the time span of sixty years. From annual average availability of 5177 cubic meter in 1951, it has gone down to 1545 cubic meter in 2011. Therefore, the objective of this paper is to prove that with growing population, water consumption is also increasing but with decrease in its availability over the period of time.

Keywords : water-supply, over population, drinking water service, rural growth, urban growth sustainable development.