A field experiment was conducted in wet and dry seasons of 2006 and 2007 at Hyderabad to study the influence of different methods of crop establishment viz., system of rice intensification (SRI), Eco-SRI (nutrients applied through organic source only and conventional method on rice productivity, water use efficiency and its productivity. During wet season, grain yield was significantly higher in SRI than conventional method and Eco-SRI by 10.3 and 33.4%, respectively. Whereas, SRI and conventional method were on par and superior to Eco- SRI in rabi. Among the cultivars, Swarna and DRRH2 were significantly superior to other varieties in kharif and rabi, respectively. There was a mean saving of 32% water in SRI as compared to conventional method. Further the amount of water used for 1 kg grain production was higher (3177 lts) for conventional as compared to SRI method ( 2162 lts). Hence, SRI can become a viable alternative approach to the conventional transplanting having advantage of both in terms of higher yield and water productivity especially in the areas of limited water situations.