Irrigation has been an important factor in the development of agriculture in India, which is clearly demonstrated by various studies (Gadgil, 1948; Dhawan, 1988; Rath and Mitra, 1989; Vaidyanathan et al., 1994; Narayanamoorthy and Deshpande, 2005). It helps not only to increase adoption of yield-increasing crop varieties, cropping intensity and productivity of crops but also to provide yearround employment opportunities and to push up the wage rates for agricultural laborers (Dhawan, 1991; Ray, 1992; Vaidyanathan, 1994; Narayanamoorthy and Deshpande, 2003). The impact of irrigation on poverty can be perceived through three different routes. First, the increased local availability and the resultant affordability of food grains due to lower prices reduce the number of poor people. Second, the increased labor absorption due to intensifi cation of agriculture and consequent rise in wage rates and income make it possible for the rural poor to cross the poverty barriers. Third, the secondary effects of irrigation in terms of increased service opportunities within and outside the rural areas, better quality of life and consequent industrialization increase the tempo of economic activities in the irrigated regions, which results in poverty reduction. For instance, a study involving fi eld research carried out in Andhra Pradesh found a dramatic change in cropping pattern in favor of sugarcane and banana due to increased availability of groundwater irrigation among both well-owning and non-well-owning farmers, which resulted in increased demand for labor and wage rate substantially (Shah and Raju, 1988). Both increased affordability of food grains and increased wage rates have substantially reduced poverty in areas where groundwater irrigation is well developed.