The judges of the Stockholm Water Prize say his methods have also prevented floods, restored soil and rivers, and brought back wildlife.
The prize-winner, Rajendra Singh, is dubbed “the Water Man of India”.
The judges say his technique is cheap, simple, and that his ideas should be followed worldwide.
Mr Singh uses a modern version of the ancient Indian technique of rainwater harvesting.
It involves building low-level banks of earth to hold back the flow of water in the wet season and allow water to seep into the ground for future use.
He first trained as a medic, but when he took up a post in a rural village in arid Rajasthan he was told the greatest need was not health care but drinking water.
Groundwater had been sucked dry by farmers, and as water disappeared, crops failed, rivers, forests and wildlife disappeared and people left for the towns.
“When we started our work, we were only looking at the drinking water crisis and how to solve that,” Mr Singh said.
“Today our aim is higher. This is the century of exploitation, pollution and encroachment. To stop all this, to convert the war on water into peace, that is my life’s goal.”
The Stockholm International Water Institute, which presented the prize, said his lessons were essential as climate change alters weather patterns round the world.
Its director, Torgny Holmgren, said: “In a world where demand for freshwater is booming, we will face a severe water crisis within decades if we do not learn how to better take care of our water. Mr Singh is a beacon of hope.”
In its citation, the judges say: “Today’s water problems cannot be solved by science or technology alone. They are human problems of governance, policy, leadership, and social resilience.
“Rajendra Singh’s life work has been in building social capacity to solve local water problems through participatory action, empowerment of women, linking indigenous know-how with modern scientific and technical approaches and upending traditional patterns of development and resource use.”
The award was applauded by Katherine Pygott, a leading UK water engineer who has drawn on Mr Singh’s work to help prevent flooding in the UK.
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