In 1954 Government of India announced the National Water Supply Programme and made provisions to assist the States in the implementation of their urban and rural water supply schemes. The State Government were asked to set up their own Public Health Engineering departments and build up adequate number of trained personnel. Following this, in Kerala, water supply and drainage were delinked form Waterworks and Drainage department and the Public Health Engineering Department was formed in 1956. This department was responsible for investigation, planning, design, execution, operation and maintenance and the management of water supply and sewerage schemes in the urban and rural areas of the State. Since independence, the Central and State Governments introduced several new programmes in the water and sanitation sector. The implementing agencies in the States failed to cope with the increased workload and experienced lot of problems. From the early 1960s expert panels repeatedly pointed out lack of autonomy as a main constraint. Several other expert bodies have also suggested the setting up of statutory water and sewerage boards as an essential step to improve the performance of this sector. As early as 1960-61, the National Water Supply and Sanitation Committee had recommended that independent statutory bodies styled as ‘Water and Drainage Boards either on a State-wise or on a region-wise should be set up, clothed with adequate statutory powers to promote and finance water supply and sewerage schemes for all urban local bodies. Similarly, the Planning Commission in the Third Five Year Plan report (1961-66) had recommended that statutory water and sewerage boards, empowered to float loan and levy cess and set up with the object of undertaking water supply and sewerage schemes with their jurisdiction, were likely to be helpful in the effective and efficient management of water supply schemes. The All India Seminar on financing and management of water and sewerage works held in 1964 also recommended the formation of water and drainage boards. The High Level Committee on Social Infrastructure and Services had observed in its report in 1984 as follows: “It is hard to find any definite policy being followed in all these prior to the commencement of the decade (International Drinking Water Supply and Sanitation Decade), not to speak of the strategies evolved or the specific measures taken and pursued in any systematic manner. More often than not, schemes were taken up in various corporations, towns and panchayats more from consideration of convenience, political pressure and availability of funds. With the result, it cannot be claimed that any of the rationale followed for the development of the sector has been adopted. This sector (water and sanitation), should be declared as a specialised one with its entire management vested in a statutory autonomous board/boards with full powers for their entire development, thus including collection of revenue, pricing, mobilisation of the sources etc.” With substantial loan assistance from the Life Insurance Corporation of India, the Public Health Engineering Department ventured on a massive water supply programme, primarily urban, in the early seventies. Direct assistance from the Government of India under the Accelerated Rural Water Supply Programme helped to improve the rural coverage. As a result, during the period 1970-71 to 1980-81, 33 urban water supply schemes and 955 rural water supply schemes were brought into operation in the State (Report of the High Level Committee on Social Infrastructure and Services, 1984). The Public Health Engineering Department could not raise the huge investments needed for extending its services. Assistance of external agencies was badly needed and it was believed that, the constitution of an autonomous body would help in mobilising the resources. The recommendations of the expert bodies also supported for formation of an autonomous body for the development and regulation of water supply and wastewater collection and disposal and matters connected there with. The Kerala Water Authority was constituted by the Government of Kerala on the 1st April 1984 through the proclamation of the Kerala Water and Wastewater Ordinance which was later ratified by the enactment of the Kerala Water Supply and Sewerage Act, 1986 (Act 14 of 1986). The dilating significance significance attributed to the water supply sector is apparent from the transformation of a part of Government department into a large autonomous body of the State’ with several functions attached to it. This systematic evolution which took place over the period of time would endorse the fact that water supply sector should be run and operated with professional approach in administration, finance and engineering. Otherwise the Government will be forced to own the enhanced financial burdens in the years to come as well