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Despite being rich in fresh water resources, water shortage is a major issue in many parts of Nepal. The new constitutional changes and institutional reforms provides wider powers to local bodies at the village, municipality and district level to plan and manage services including services relating to drinking water, irrigation, sanitation and conservation of water resources. However, the water use arrangements among various sectors are commonly institutionalized through the agreement between the water use activities, which seems to be more challenging under the changing current socio-economic and political situation. The study examined the evolution of water consumption and economic activities in Kaski District, particularly placing Pokhara in the central, and address the governance issues of water access and water allocation with policy options from the perspective of sustainable economic development. The …