This is a tricky issue. Ultimately the geography of a region should dictate its population and economic prospects. When i say geography this includes the residual energy of the system. The indra gandhi canal has brought its sent of woes to the command area including waterlogging and salinity. Cross basin water transfer is very dangerous and creates only short term relief. All irrigation projects only project the good. No project in india has taken drainage costs into the initial costs as this would make the whole concept financially unviable. In spite of all the intellectual thought that goes into it, humans behave like any other animal in the ecosystem (at least in countries like india) and follow the S curve of population growth. Unsustainable growth will cause huge pressures in the ecosystem and ultimately end like all S curves starvation, death and a reset to the bottom of the curve. If this appears exaggerated, observe the empirical example of India's green revolution. A population jump from 400 million to 1 Billion + in 50 years due to wide availability of cheap cereals via public distribution. Pound for pound cereals are the best energy source for the population with the possible exception of tubers. Providing the building blocks for population explosion without requisite checks and balances is shortsighted.
All in all my point is that any natural system has an intrinsic amount of energy available to it within the natural framework. Harnessing excess sources of energy and water energy is pushing us to the brink. (even cross border movement of concentrated energy resources like oil has this impact, as all our conversions, crude oil to motive power or coal to electricity are highly inefficient in absolute terms in to 30 - 50 % range)
Maybe the solution is the traditional one. Water must be caught and stored where it falls. Some NGO's line TBS (http://www.tarunbharatsangh.org/) have done amazing work here and are indeed more sensible than politicians who dream of linking rivers, and destroying the nation in the process. In fact TBS has worked extensively in rajasthan and shown how barren lands can be regenerated with commonsense and local participation. Why should our populance depend on the government and bureaucracy that fundamentally believes in central solutions for a problem that is a legacy of central thinking ? Cross basin water transfers will *not* benefit 'amm aadmi'!