Water as a basic natural resource plays a critical role in any country’s economic, ecological, and human development. Water is a state subject in India, and the provision of reliable, safe, and sustainable supply of water has emerged as a challenge due to geographical and institutional constraints. The water scarcity in 11 major states is evaluated through 20 variables that capture the multidimensional aspects of scarcity and the water poverty index. The results clearly indicate an alarming situation as these states face medium to severe scarcity. A sensitivity analysis indicates that the most critical variables impacting the water sector include socio-economic and environmental factors.