The analysis presented in this paper shows that in water-scarce regions of India, run-off harvesting does not offer any potential for groundwater recharge or improving water supplies at the basin scale. The issues are many: (1) Water harvesting in the "closed" basins have downstream negative hydrological impacts. (2) Due to high inter-annual variability in rainfall and therefore run-off, during drought years the water harvesting structures have become highly unreliable, whereas an attempt to capture run-off during wet years would remarkably increase the unit cost of harvesting water. (3) In closed basins, intensive water harvesting would lead to negative welfare outcomes due to high negative externalities at higher degrees of basin development. (4) Even at the local level, physical efficiency of water harvesting is likely to be poor, mainly due to groundwater-surface water interactions and the poor storage capacity of hard rock aquifers underlying most of the water-scarce regions. The artificial recharge systems in natural water-scarce areas in India are economically unviable. Also, the much talked about virtues such as promoting equity in access to water, social justice, water security for the poor, and realisation of greater economic value from the use of water, can be hardly achieved through water harvesting programmes in water-scarce regions, as practised today.
