Greater Thal Canal is projected in an arid region of Pakistan where crop water requirements are accomplished by rainfall and ground water pumpage with low crop yields. An agro-economic model (Indus Basin Model Revised) has been incorporated to optimize water management options for better agricultural output. Model simulations for non-perennial canal system under partial lining scenario posed net water requirement at canal head as 2368 kaf, which is less than the canal water availability (2496 kaf) at 80% canal efficiency while modeled complete lining option demonstrate the net water requirement at canal head as 2460 kaf which is near to the canal water availability (2496 kaf) at 85% canal efficiency. The annual net recharge trough canal seepage to the ground water system has been estimated as 1226 kaf, which is 200 kaf higher than the partial lining option. By assuming partial canal lining option, a ground water recharge of 1326 kaf is estimated while total recharge from all resources is optimized as 2154 kaf. In regard of complete lining option, a ground water recharge of 1128 kaf is expected. The predicted annual rise in water table is 0.9 meter in both partial and complete canal lining options. Simulated annual recharge is an attribute of increase in seepage from watercourses, increase in crop area and a decrease in groundwater pumpage. This rapid rise of groundwater table in complete lining system may result in creating water logging conditions while partial lining system can be adopted under increased cropping intensity.