Water being a state subject, the act will, however, not be binding on states for implementation.
Addressing the inaugural session of 'Bhujal Manthan- 2' here, Bharti said a committee will also be formed to suggest ways to conserve fast depleting groundwater levels through aquifer recharge, particularly in drought-hit areas such as Marathwada and Bundelkhand.
Secretaries of Water Resources, Rural Development, Environment and Agriculture will be part of the committee, which is expected to submit its report in a month, she said.
"We are going to come out with the draft model act aimed at conserving ground, surface and rain water and one which stresses on using treated water optimally. 62 per cent of water used by Israel is treated water. Why can't we too do that? We too can do it," Water Resources Minister Bharti said.
The Minister said the act will focus on using waste water for infrastructural and industrial activities, while recycled sewage water will be used for irrigation purpose.
Special secretary in the Water Resources Ministry, Amarjit Singh, seconded the Minister and stated that 80 per cent to 85 per cent drinking water is sourced from underground across the country.
Around 60 per cent to 65 per cent of water used for irrigation is fetched from underground, he added.
"Countries like China use less ground water than us, only to the extent of 30 per cent of what can be recharged in that country annually. So, we need to make sure the withdrawal is sustainable (through the proposed act)," he said.
Bharti said the government also plans to complete aquifer mapping across the country over the next three years.
At the same time, she said, the government plans to recharge groundwater on priority basis across 1066 blocks (which could either be a district/taluka/mandals) where groundwater is "hugely exploited."
"The Marathwada, Bundelkhand, Rajasthan, Gujarat and now even the Uttarakhand...The trees atop mountains in Uttarkhand which used to hold water have been cut. Hence, we will have to give priorities to these areas and recharge ground water," she said.
Rural Development Minister Narendra Singh Tomar, who too addressed the event, said his ministry will contribute to the purpose by creating recharge structures through Mahatma Gandhi National Rural Employment Guarantee Act.
"The purpose is to see village water is stopped in the village itself," he added.
Secretaries of Ministries of Water Resources and Drinking Water and Sanitation, Shashi Shekhar and Parameswaran Iyer respectively, also addressed the event.
Meanwhile, a senior official informed that the Water Resources Ministry spent Rs 3991.28 crore last fiscal on water conservation works including, that on rainwater harvesting and groundwater recharge.
During the on-going fiscal, the ministry has spent Rs 5082.27 crore as on November 25 for the same purpose, he added.