Many factors associated with modern society have combined to produce a burgeoning in water demand. This demand can be realized only through efficient management of water sources and supply systems. To achieve sustainable water supply the beneficiary communities should be made to maintain the facilities created in the rural areas. The main aim of this paper is to critically review and evaluate the major sectors influencing the quality of life in rural areas including the role of water supply and sanitation and to develop Quality of Life Index (QoLi) to be used as a tool for efficient management of such sectors.