The current study uses contingent valuation technique to estimate the value of clean water in river Musi in Hyderabad, India. The main source of pollution of the river is untreated domestic and industrial wastewater from the urban area of Hyderabad. Therefore, people’s Willingness To Pay [WTP] for the treatment of their wastewater to different quality levels (Level C, B & A) is estimated using a payment card method. Four variables were considered to influence the willingness to pay - number of years the household lived in Hyderabad; individual perceived importance of controlling water pollution; household income levels and proximity to the river. The results of the logistic regression confirmed that the variables - perceived importance of the respondent of controlling water pollution and household incomes have a significant influence on people’s WTP. Only 30% of the respondents were willing to pay for wastewater to be treated to level C. It was concluded from the survey results that 100% cost recovery of sewerage services and wastewater treatment would not be possible in Hyderabad in the current situation. However, a phased increase in the water tariffs accompanied with simultaneous improvements in service delivery mechanisms and awareness among consumers may be successful in the long-run.