This article addresses a gap in the water equity literature arising from the simultaneous use of surface water and groundwater in India. Using two diverse case studies – one agricultural (Kukdi) and one urban (Chennai) – we demonstrate how gaps in planning, design and policy exacerbate inequity. Groundwater abstraction from user wells allows wealthier users to both free-ride and capture a greater share of the resource. By converting a public resource to a private one, it worsens inequity and jeopardizes the sustainability of water projects. The article suggests that better monitoring, inter-agency coordination and rethinking water entitlements and norms are needed for going forward.