The tremendous growth of population and increasing urbanization has resulted in generation of huge wastewater from household, industries, hospitals and treatment plants. Wastewater is flushed into various water bodies with or without proper treatment which may cause deterioration of receiving water bodies. Wastes can be reused, recycled and resources can be recovered from them creating a system of zero liquid discharge. The concept of circular economy encompasses optimal recycle and recovery as well as eradication of needless waste creation. There are various techniques used in developed countries to achieve zero liquid discharge. Advanced techniques are expensive to set up initially but they have long term benefits as they prevent generation of wastewater. This helps in avoiding the various negative impacts on environment preventing health hazards. Management of resources in judicious ways helps in reduction in generation of wastewater and helps us to maintain the sanctity of our rivers and environment. Since wastewater generation is prevented, the cost of cleaning and maintenance associated with management of effluent treatment is also reduced. In this chapter, we have discussed the challenges in water resource management and factors influencing it. Status of Zero Liquid Discharge in developing countries for wastewater management has been discussed. Concept of Circular economy involving principle of 6 Rs that were used in solid waste management can be applied to liquid discharge management contributing to sustainable way of conserving water. Ways and techniques to achieve Circular Economy of Water Resources and their advantages are discussed. Application of principles of circular economy in water resource management is need of the hour for achieving sustainable development goals and to tackle the impending water crisis the world is facing now.