This report is a case study on the Krishna River Basin in South India. The basin has witnessed intense water development resulting in downstream environmental degradation. The observed decline in discharge to the ocean sends a strong signal: there is only little scope for further water supply development, and further taming the Krishna waters will exacerbate environmental degradation. This report investigates the linkages between rural development dynamics and the downstream environment of the Krishna Basin in order to understand when and how rural development and environmental preservation come or do not come into conflict and identify potential areas of intervention to limit the degradation of the downstream ecosystems of the Krishna Basin.