Urbanization likely to impact ground water quality and quantity leading to higher uncertainty and difficulties in management of pollution. Results yielding a good indication but the scenario demands continuous surveillance of waste water disposal from unauthorized discharges from small scale industries in Balanagar, Jeedimetla and Sanathnagar industrial development areas into the Kukatpally nala. It impacts very much on the Hussainsagar lake water. The groundwater flow model has computed groundwater balance for the entire catchment area of Hussainsagar. Significantly the lake water – groundwater interaction in the Hussainsagar was computed from the groundwater flow model. The upstream and down stream channel from Hussainsagar up to Musi river course have also been simulated with river boundary condition in the flow model.