This study has estimated the supply augmentation of groundwater recharge due to creation of water harvesting structures and has assessed the cost-effectiveness of rainwater harvesting for groundwater recharge on watershed basis in one of the sub-watersheds of the Kolar district, Peninsular India — a typically hard-rock area. The study is based on the primary data for the year 2008-09 collected from a sample of 90 farmers having irrigation bore-wells in the selected watershed named Thotli. The study has indicated that the annual draft of irrigation water exceeds the annual recharge, causing a negative balance. On an average, the returns per rupee investment have been found to be ` 1.80 on farm pond, ` 1.78 on recharge pit and ` 1.39 on field bund. The cost incurred to impound a metre cube of water has been found as ` 3.01 in the case of field bund, where estimated recharge benefit is 5.6 m3, ` 1.67 /m3 in the case of recharge pit (with an estimated recharge benefit of 720 m3), and ` 1.33 /m3 in the case of farm pond (recharge benefit of 1350 m3). The discounted cost-benefit analysis of the investment on water harvesting structures has indicated that the investment on water harvesting structures is cost-effective and financially-viable.