Milk productions in India during 1950-51 was 17 million tonnes which has reached to 78 million tonnes in 1997-98. Presently India ranks first in the world in milk production. The Operation Flood Programme was instrumental in dairy development activities. These programmes are useful in upgrading the standard of living of farmers.

Since the ascent of economic liberalisation in the 1990s, Washington Consensus policies - exemplified by structural adjustment and reform - have become the norm across the globe. As a result the State redefines its role from that of a provider of basic services to a 'facilitator' that enables access to these services.

Most of the rural development models considered natural resource management as the means for rural transformation. The present paper reveals the impact of one such rural development models named "Adarsh Gaon Yojana" of Government of Maharashtra, which is based on natural resource management and watershed management.