Water is indispensable for life since it is a basic need and is also important for economic activities. Although Bhutan has one of the highest per capita water resource availability in the world with 94,500 m3/capita/annum, the imbalance of geographical and temporal distributions is leading to experience of shortages in local areas.This study determined the shortage of water supply and its socio-economic impacts in Laptsakha community under Punakha,Bhutan.The semi structured questionnaires were distributed to the household of 74 following census method sampling.The result showed that the climate change had significant effect on water scarcity (R²=.208, p<.05). There was a moderate positive correlation between total income and total spent on buying food items (r=304, p<.05); however, there was no significant between total annual incomes and annual expenditure on materials to cope up water shortage (r=.209, p >.05). Ability to maintain hygiene was significantly affected by numbers of days the water was available in the tap per week H(2)=7.030, p<.05). The findings from the study also shows that due to decrease of water supply, it has adverse impacts on total annual income of the households and on their health.This study concluded that water shortage has adversely impact on socio economic of the people of Laptsakha Chiwog, which requires implementation of new strategies and actions towards allocating new source of water for households.
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