The author reports on the Kerala model for water sector development broadly adopted as a role model for poverty reduction and build up of social capital. It is a community based organisation with its focus on facilitating a stable income to the poor, and composed of a People's Plan Campaign, the Kudumbashree (women-based poverty eradication programme), with grassroot level neighbourhood groups, federated into an area development society. It promotes savings and credit channelling, capacity building and entrepreneurship development. Activities include awareness raising on water conservation and hygiene, utilization of student power, promotion of small, cheap and low technology projects that people can understand and undertake (small reservoirs, tanks, rainwater harvesting structures, water meters), as well as microenterprises, and training of women-based repair groups.