Many government water supply schemes fail in terms of public acceptance, primarily due to lack of public awareness, transparency on water tariff policy, and angst of water privatization. The present work attempts to identify failure factors taking into account on existing household water quality and importance of awareness programs through a case study of an upcoming government water supply scheme, which is facing stiff public resistance. The study aims to assess public perception on existing groundwater quality and acceptance of a paid water supply scheme over conventionally used free groundwater, through a comparative study on number of household's willingness to procure water, before and after groundwater quality awareness program. A questionnaire survey, groundwater sample collection and laboratory analysis of 1568 (sample size determined statistically) household groundwater samples was conducted. Laboratory analysis revealed that 55%, 12% and 9% of groundwater samples exceeded WHO guidelines for iron, fluoride, and arsenic, respectively. The public perception on groundwater quality found far away from reality, only 3–4% people were aware of contamination and the rationale for public opposition were more of public misconception and/or in erudite nature. Public awareness on groundwater quality and its adverse health effects were found to be the most influencing factors affecting public willingness to procure (WtP) that improved from 58 to 74% after creating awareness. The findings of public WtP were fortified by logistic regression model which uncovered interesting trend of public hesitation and explicitly thrown light upon sensibility of people who disclosed their income during survey.