Various water supply mechanisms prevail in Hubli-Dharwad, a Tier-2 city in Karnataka State of India, wherein, piped water does not cover the entire city. Since 2008, Karnataka State Government’s demonstration project with World Bank assistance has been serving about 10 per cent of the entire population with 24×7 water service. A majority of the population on the city outskirts with no consistent water service faced hardships in obtaining water through bore wells, public stand posts, and from private vendors at exorbitant prices. Lack of tenure and the inability to pay connection fees were some of the barriers that precluded the urban poor from having a water connection. The local corporation faced poor revenues exhibiting poor performance. This paper discusses how innovative approaches were devised and implemented using local knowledge to address such barriers and increase water access. We also discuss how the local revenues improved and were used to provide cross-subsidies to the urban poor.