Ever growing population of Mumbai has put additional pressure on existing infrastructure in terms of huge demand for portable water as well as treatment of city’s waste water. Study aimed at review of city’s wastewater in order to understand the reality of treatment quality of wastewater, it’s reusability in terms of offsetting growing water demands of domestic, industrial and agricultural fields in and around the city. Literature review and case study method was used in order to get primary as well as secondary data for achieving data regarding overall functioning and water balance of the city. Because of lot of irregularities, current wastewater management systems are asking for paradigm shift from current centralized wastewater treatment systems to decentralized wastewater treatment systems. Conventional treatment systems treat wastewater as a ‘waste’ yet there is some reuse potential. Concept of collecting water and wastewater separately for better treatment, increased reuse potential, savings upon energy and better nutrient recovery can be used in order to move towards more ecologically and economically sound waste water management systems. To demonstrate this idea documentary and discourse analysis is used. The paper starts by providing general overview about water scarcity and security in India and then proceeds to provide comparative analysis between centralized and decentralized treatment systems used in the city in order to identify it’s water reuse potential. Second, legislative and policy framework used in the city for wastewater treatment and management which is then followed by outline of the current situation and reflections on system dynamics in City. Third, the paper ends with a discussion on practical implications, policy options and conclusion. The presented study gives conceptual model based on Net Zero concept which can be helpful in making of sustainable future cities.