Agricultural water management plays a significant role in the sustainable development of the watershed. Three different water management techniques based on the water harvesting scenario, demand reduction scenario, and soil management scenario are simulated. In the first scenario, the runoff potential and suitable measures to harvest the surface runoff in the watershed are considered. In the second scenario, initially, double-cropped areas in the watershed are identified. Then, to reduce agricultural water consumption, the double-cropped regions that are suitable for single cropping with vegetation are identified. The third management measure is the addition of soil organic carbon in the watershed to retain the soil moisture. The hydrological modeling is carried out with modified scenarios to compute the hydrological responses. The scenarios are evaluated for their environmental and economic effectiveness. All the scenarios indicated improvement in the water yield and the soil moisture storage in the watershed. The response analysis technique using spatial inputs provides a good insight into the watershed conditions for drought management.