Water availability for sustainable agriculture is becoming extremely critical factor with passage of time. There is dire need to enhance water use efficiency in crops so that higher crop yields could be obtained from limited sources of water. A series of experiments conducted during last several years under field conditions to assess the effectiveness of novel bacteria having ACC-deaminase enzyme for improving growth and yield of cereals. After intensive screening of bacteria, we have successfully isolated a few bacterial strains containing ACC-deaminase enzyme which showed tremendous potential to promote growth and yield of cereals under water deficit stress conditions.