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The nature of water does not change depending on its source of location either in rural or in urban environment. However, the special environment defines the characteristics and conditions of water resources. Thus distinction in the definition of water (urban or rural) gets importance because of varying modes of uses of water, different cultural practices and also variation in land uses in rural and urban environments. In rural areas, the major share of water is used for agriculture, whereas in urban areas water is used for domestic, commercial and industrial purposes depending on the functional identity of the city. The fast increasing urbanization and its negative impact on the availability of natural resources especially water have compelled the planners and policy makers to give more importance to the management of water in urban areas than in rural counterparts. As a consequence, the dialogue on water resources gets divided up depending on their location and urban water getshighest priority because of the higher density of people living in those areas.