Sediment deposition as a result of soil erosion is a significant problem in the village water tanks. In order to increase the rainwater storage capacity, removal of sediments from water tanks was taken up under the State Government Water Conservation Programme in Medak District, Andhra Pradesh, India. The feasibility of desilting operations and returning such huge amounts of sediments to agricultural fields was assessed by determining the sediment quality in terms of nutrients, organic carbon (C), biological properties and their economic value as a source of plant nutrients.