Himachal Pradesh is a hilly state and 70% of its population depends upon agriculture for their liveli-hood. 81% of the agriculture in Himachal is rain fed and farmers face severe soil moisture stress at germination stage and long spell without rain during subsequent growing in winter and pre monsoon crops due to erratic distri-bution of rainfall in space and time. Though the average annual rainfall in the region is 1200 mm, the agricultural productivity is severely affected due to non-availability of water at critical stages of crop growth. In addition to it, there is huge shortage of drinking water in Shiwalik hills of Himachal Pradesh during summer months. The only option available for most of the farmers is to collect and store water resources available in three forms namely, di-rect surface run off, run off from rooftops of houses and cowsheds and the discharge from small springs. These springs has low discharge which generally goes waste, but its collection in storage tanks can be developed into a large water resource to solve drinking water problem and for micro irrigation. The paper highlights the various alternatives available to solve water shortage problems of the region. The rainwater can be collected in dugout farm pond lined with Low density polyethylene sheet which can be subsequently used for irrigation and other purposes. The integrated approach can be applied in far off places in the Shiwalik hills which pose a challenge to developmen-tal agencies in this undulating, rugged and difficult terrain.