The objective of this study is to suggest ways of achieving a sustainable and equitable use of water through the use of payments for environmental services (PES) and through trade-offs. This paper looks at the problem by describing the hydrological setup (water sources, sinks and storages). It then describes the value addition of water by each of the users and the efficiency of use by each user sector. The paper then goes on to describe opportunities for PES, and makes recommendations for possible approaches.