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What makes water scarce? This paper argues that water scarcity is both 'real' and 'constructed'. While manufactured through political and policy processes, a combination of socio-political, discursive and institutional factors, water scarcity is experienced in terms of real, tangible effects. By focusing on the case of 'water-scarce' Kutch and its relationship with the controversial Sardar Sarovar Project, this paper argues that state discourses and programmes essentialise scarcity as a natural phenomenon that enables the political legitimisation of large dams. In the process, they also marginalise local knowledge systems and livelihood strategies that are adapted to conditions of uncertain and limited water supply.