The report states that an average of 200,000 Indian lives are lost every year due to inadequate supply or contamination of water.
Sustainable water development has seen slow progress in India in recent years. Though 80% of the country's states have water conservation legislation, bad data management and nonexistent pricing of water have kept the country from making significant change, the report states.
Poor irrigation techniques and severe contamination of groundwater have brought India to the edge of this crisis.
India is predominantly an agricultural country, with 80% of its water used for irrigation, the report says. The irrigation practices followed by farmers are inefficient at best.
"Policies like several states giving free electricity to farmers or giving financial support for groundwater extraction -- borewells and tube wells -- results in uncontrolled exploitation and wastage of resource," said Suresh Rohilla, director of urban water management at the Centre for Science and Environment.
Drip irrigation, which is a method to provide an exact amount of water directly to the root of the plant, has seen few customers. The implementation is costly for the average farmer, and state government provides limited support, said Samrat Basak, director for urban water at the World Resources Institute.
"Primarily, water is not valued in India. It is very cheap in India. People think it is free," Basak added.
According to the report, three-quarters of the Indian population is affected by contaminated water, and 20% of the country's disease is thought to directly correlate.
India does not have an adequate number of sewage treatment plants, so untreated urban wastewater is often added to water flowing downstream -- the same contaminated water used in rural areas for drinking, according to the report.
Twenty-one major Indian cities are estimated to run out of groundwater by 2020 -- just two years away.