PSI's role as a CAPART-mandated support organization had made it aware that government supported watershed programmes had fallen into a rut and were nearing a dead- end. CAPART's funding for watershed programmes in Uttarakhand and Himachal had dried up due to selection rules that were not appropriate for the mountain regions. Several efforts were made by PSI and other support organizations to improve the states and central governments' watershed programmes. But after several years of largely futile efforts, PSI decided to launch its own watershed programme in the central-western Himalayan region.
In 2002 CPWD initiated the 'Resolving the Himalayan Dilemma Programme' (RTHD) with the support of Sir Ratan Tata Trust, Mumbai to provide training and development support to 15 VOs in Uttarakhand and Himachal Pradesh to undertake community-centered natural resources management projects on a watershed basis, each in an area of about 500 ha over a period of 4 years.

The main objectives of the RTHD Programme are:
(1) To create successful models of participatory watershed development in mountain agro-ecological regions;
(2) Promote adequacy of water, food grains, fuel, fodder and employment in the watershed villages;
(3) Build the capacities of good young VOs in Himachal Pradesh and Uttarakhand to undertake natural resource management projects;
(4) Influence state-sponsored watershed development programmes through a demonstration effect, and
(5) Establish a center of excellence at PSI for supporting NRM initiatives.

The Programme has evolved mountain specific guidelines. In the government programmes community mobilization and capacity building are limited to the first year in a four year programme. Experience has shown CPWD that community mobilization and capacity building are continuing processes. Hence greater budgetary allocation for community mobilization and training, spread over the entire programme period, has been made in the RTHD Programme. The smallest unit of development in this programme is a village and village development committees (VDCs) manage all the planning and project implementation at that level.

The Programme lays strong emphasis on women's involvement in decision- making. Almost half the VDC members are women. It emphasizes community works, traditions of water conservation, vegetative conservation measures, linkages with PRIs and government schemes and the development of mountain specific appropriate technologies, e.g., spring sanctuaries, hydrams and greenhouses for off-season vegetable cultivation. CPWD has signed an MoU with the Watershed Management Directorate of the Government of Uttaranchal for mutual support and cooperation.