The draft law is expected to be placed before Union Cabinet for its approval in a month.
Amid several inter-state disputes over river water sharing, the Centre has brought final draft of the National Water Framework Bill, 2016, that stresses managing water at basin-level and "right measurement" of state's contribution to river system to resolve conflicts.
The draft Bill pitches for establishing River Basin Authority for each inter-state basin to ensure "optimum and sustainable" development of rivers and valleys.
The draft law is expected to be placed before Union Cabinet for its approval in a month, before it is tabled in Parliament.
It suggests states to recognise the principle that the rivers are not owned by the basin-states but are "public trustees".
It says all basin states have "equitable" rights over a river water "provided such use does not violate the right to water for life" of any person in the river basin.
The draft Bill says every person has a "right to sufficient quantity of safe water for life" within easy reach of the household regardless of caste, creed, religion, age, community, class, gender, disability, economic status, land ownership and place of residence.
The draft Bill also suggests states to ensure water is conserved.
"Presently, there are disputes because nobody (states) knows his/her (exact) contribution to a river's catchment area. When a state will know its exact contribution to the catchment area, it will know quantum of its rightful share.
The bill focuses on right measurement of the water at basin-level," Water Resources Ministry Secretary Shashi Shekhar said.
Describing the draft Bill as "comprehensive" one, he said the model law also stresses on Centre and state working in partnership for managing water.
It proposes establishing institutional arrangements at all levels within a state and beyond up to an inter-state river-basin level to "obviate" disputes through negotiations, conciliation or mediation before they become acute.
"All basin states are equal in rights and status, and there is no hierarchy of rights among them, and further, in this context, equality of rights means not equal but equitable shares in the river waters," the draft Bill says.
Water being a state subject, the draft bill, however, will not be binding on states for adoption.