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To prepare daal: Combine water, lentils, red onion, tomato, serrano, salt, chile powder and turmeric in a large saucepan. Bring to a boil over high heat. Adjust heat to maintain a simmer, cover and cook, stirring occasionally, until the lentils are tender and the mixture is thickened, 25 to 30 minutes. Stir often during the last 10 minutes to prevent burning.
Meanwhile, prepare tarka: Heat ghee (or oil) in a large saucepan over medium heat. Add onion, tomato, chiles, garlic, ginger and cumin seeds; cook, stirring often, until golden brown, 5 to 7 minutes.
Serve the daal topped with the tarka. Garnish with kasuri methi and cilantro, if desired.