While the Irrigation Department in Andhra Pradesh was preoccupied with the contractor-oriented works in new projects, there was practically no flow of funds for the maintenance of the existing systems. The Government of Andhra Pradesh undertook a series of bold reform measures in quick succession to mitigate this plight. The encouraging initial impacts of the program have garnered worldwide attention. This report brings out the legal, economic, social and political processes through which this reform program has gone so far. It considers the further progress of the program that would ultimately create a 'virtuous circle.' Study of Andhra Pradesh's successes and failures with this program can provide a design for a similar or modified reform program in other developing countries which would be suited to their circumstances.