The committee, chaired by Mihir Shah, a member of the erstwhile Planning Commission, with five other experts on water-related issues and a joint secretary from the water resources ministry, submitted its report to the ministry last month.
The panel also warned against the perils of interlinking of rivers and dependence on large dam projects.
The new National Water Commission with presence across all river basins should look at both surface and groundwater management in an integrated fashion and bring under its ambit industrial use of water resources, which is rapidly increasing, the experts said.
The Central Water Commission was set up in 1945 and the Central Ground Water Board in 1971. The report notes that the two have continued to function un-reformed since their formation over several decades.
The panel has recommended bringing more human resources as well as different kind of expertise into the new commission, including ecologists and social scientists to do away with the existing biases of the two apex organisations.
Noting the dismal spread of last-mile irrigation facilities over decades, the panel suggested that the Gujarat and Madhya Pradesh model of participatory last-mile connectivity be deployed across the country.
"States should only concentrate on technically and financially complex structures, such as main systems up to secondary canals and structures at that level. Tertiary level canals and below, minor structures and field channels should be handed over to Water Users Associations of farmers," the panel's report said.
It also said that command area development - setting up last-mile irrigation channels down to the farms - be integrated into the planning and cost developing process for all irrigation projects, something that is not currently done. This and other reasons have left the efficiency of irrigation systems abysmally low.
"The Central Water Commission has studied the water use efficiency in 30 completed major and medium irrigation projects. Nine projects have a water use efficiency of less than 30 per cent. The average across 30 projects is 38 per cent," the panel noted.
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