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Water is essential for sustaining the life on earth. Achieving the food supply and improving the quality of life totally depend on the availability of fresh water. The decreasing quantity and increasing demand of fresh water widen the gap between its availability and demand. This gap could be fulfilled by constructing additional water reservoir. There is continuous rift over water among all provinces of Pakistan. The province Punjab is emphasizing in the construction of Kalabagh dam for better use of 38 million acre feet water dropping to sea. The three other provinces, Sindh, K.PK and Baluchistan are opposing the Kalabagh dam for royalty related issues. Sindh also objects that the storage of Indus water would seriously affect her delta ecosystem. Provinces are in fear of losing their share of water, blaming each other without knowing the reality and prefer their own interests over national interest. Furthermore, this study finds that Pakistan has failed to have any comprehensive and consolidated national water policy. The institutional arrangements are fragmented as each institution deals with the specific and narrow dimension of the water sector. The present per capita availability of water in Pakistan is about 1000m3 that clearly depicts water scarcity in Pakistan. This alarming water shortage calls for political vision, pragmatic policies and affective river regulations in Pakistan.