Rural Human settlements (villages) of India suffer from severe water supply and sanitation problems. Rural human settlements usually either have no sewerage systems or have poorly defined sewerage systems. The high strength rural wastewater is mostly discharged or thrown out into road side gutters or open drains, which in turn carry the wastewater to one or more points usually village ponds. In present work, a water management system has been proposed by adopting an integrated approach of encouraging the conservative use of water, segregation of wastewater into black and grey water, adopting eco-sanitation for the minimization of black water generation and conveyance of grey water and stormwater into village ponds. Village pond has been conceptualized as comprising of natural treatment systems and low cost treatment techniques like catch basin, constructed wetland, facultative pond, roughing filter, slow sand filter and a provision for recharging of groundwater by the treated water through vadose zone wells. Pond based treatment system will work as a passive system requiring no human intervention except for a few premonsoon works. In most of the studied villages, the additional land requirement for treatment system was found to be extremely low ranging from 0.06 acre to 2.30 acres which can be easily fulfilled in rural areas. Proposed system would work as a passive system with no power input and thus not depending on the unreliable availability of electricity in rural areas.