The global water crisis is an emerging issue because of the less availability of global freshwater resources, and still, special attention is given to the financial crisis neglecting the global water issues. The root causes for these issues mainly rely on institutional and political choices. Exceptional cases like illegal sand mining, improper urban waster management, unusual agro fertilizer usage, and deforestation are the most severe impacts water sector. Like the global situation, Sri Lanka is also facing a critical condition where some people do not have safe drinking water facilities. Usually, same as hunger; poor people are also experiencing water shortage issues. So as Sri Lankans, the aim is to improve the present condition to make a better environment for the next generation. So this paper discusses the current state in the water sector by focusing on the institutional contribution and the legal arrangement towards sustainable water management. The later part of the paper will also investigate some of the Sri Lankan water-related issues. Furthermore, the paper addresses how people can overcome issues to improve sustainability efforts by enhancing ecosystem services, rainwater harvesting systems, reducing dependency on chemical-based water treatment, and examining some Sri Lankan water management suggestions.