Indian megacities face severe water supply problems owing to factors ranging from growing population to high municipal pipe leakage rates; no Indian city provides 24/7 water supply. Current approaches to addressing the problem have been “utility centric,” overlooking the significance of decentralized activities by consumers, groundwater extraction via private wells, and aquifer recharge by rainwater harvesting. We propose a framework that makes it possible to evaluate a wider range of centralized and decentralized policies than previously considered. The framework was used to simulate water supply and demand in a simulation model of Chennai, India. Three very different policies, supply augmentation, efficiency improvement, and rainwater harvesting, were evaluated using the model. The model results showed that none of the three policies perfectly satisfied our criteria of efficiency, reliability, equity, financial viability, and revenue generation. Instead, a combination of rainwater harvesting and efficiency improvement best meets these criteria.