Much of the developing world and areas of the developed world suffer water vulnerability. Engineering solutions enable technically efficient extraction and diversion of water towards areas of demand but, without rebalancing resource regeneration, can generate multiple adverse ecological and human consequences. The Banas River, Rajasthan (India), has been extensively developed for water diversion, particularly from the Bisalpur Dam from which water is appropriated by powerful urban constituencies dispossessing local people. Coincidentally, abandonment of traditional management, including groundwater recharge practices, is leading to increasingly receding and contaminated groundwater. This creates linked vulnerabilities for rural communities, irrigation schemes, urban users, dependent ecosystems and the multiple ecosystem services that they provide, compounded by climate change and population growth. This paper addresses vulnerabilities created by fragmented policy measures between rural development, urban and irrigation water supply and downstream consequences for people and wildlife. Perpetuating narrowly technocentric approaches to resource exploitation is likely only to compound emerging problems. Alternatively, restoration or innovation of groundwater recharge practices, particularly in the upper catchment, can represent a proven, ecosystem-based approach to resource regeneration with linked beneficial socio-ecological benefits. Hybridising an ecosystem-based approach with engineered methods can simultaneously increase the security of rural livelihoods, piped urban and irrigation supplies, and the vitality of river ecosystems and their services to beneficiaries. A renewed policy focus on local-scale water recharge practices balancing water extraction technologies is consistent with emerging Rajasthani policies, particularly Jal Swavlamban Abhiyan (‘water self-reliance mission’). Policy reform emphasising recharge can contribute to water security and yield socio-economic outcomes through a systemic understanding of how the water system functions, and by connecting goals and budgets across multiple, currently fragmented policy areas. The underpinning principles of this necessary paradigm shift are proven and have wider geographic relevance, though context-specific research is required to underpin robust policy and practical implementation.