The future of India will be determined to a significant degree by its success or failure in developing its water resources. The failure of the 1979 monsoon -- which resulted in one of the worst droughts of recent record and caused an 8-10% drop in agricultural production and near stagnation in the national economy -- highlights India's desperate need for more abundant water. This report provides a current account of water resources development in India, with particular emphasis on irrigation and agricultural production. Although India's average rainfall is approximately 120 cm (slightly more than the global mean of 99 cm), it is seasonal and often erratic in timing and geographical distribution. Groundwater is unevenly distributed as well. Although irrigation development is a priority of the Government of India (GOI), the nation's existing irrigation systems are inefficiently managed. The remedy is increased construction and improved operation of distribution channels. It is estimated that a reduction in water transit losses, provision of regulatory structures, and crop planning could increase the total amount of irrigated land by as much as 25%. In addition, effective use of groundwater resources will require that the GOI assign a high priority to rural electrification because electricity provides a more economical and efficient means of lifting groundwater for irrigation purposes than diesel-powered pumps and devices driven by draft animals. Water rates charged to farmers are too low. However, it is unlikely that the central government will try to force either higher rates or other reforms though the state assemblies, where there would be sharp resistance from landholders. Inter-basin transfers to water-scarce states via a national water grid seems equally unlikely. Most probably, a national grid will be developed incrementally, with a series of projects gradually extending the system throughout the country. Overall, scarcity of capital, rising construction costs and other economic constraints will probably slow the rate of water resources development in India -- particularly with regard to the expansion of irrigated lands.