Objectives: (a) Review the water institutional structures in India in the context of water demand and supply. (b) Review and critical analysis on the various water related policies in India. (c) To understand the challenges and opportunities in water sector in India and to provide recommendations and guidelines for achieving them. Methods: Various water policies have been evolved and amended since 1987 by the Government of India and other policymakers, describing the factual scenarios of the water resources and their administrations too. This paper strives to critically review these water policies and provide recommendations in view of present challenges and opportunities of water sector. Findings: Addressing the impact of climate change on water availability and economy, concluded that the water imbalance is due to poor management from various levels of states, industries, surface runoff, lack of floodwater management, lack of dams, lakes, river basins and many more. The focus should be on river water management and building dams for water conservation. The government should frame more policies that can be strictly followed by the industries and other wastewater management agencies to make our future secure with preserved water resources. Novelty: To overcome the above challenges/ gaps in the previous water policies in India, the Author, here find its objective through this paper to review the evolution of various water policies implicated in India briefly focusing on the increasing demand for water by the escalating population, its past and present institutional arrangements and conservation practices including reusing wastewater after proper treatment.