Does groundwater irrigation reduce rural poverty? Evidence from Indian states

Groundwater irrigation has become a dominant source of irrigation in Indian agriculture today. Besides increasing the cropping intensity and productivity of crops, the intensive cultivation of crops due to timely access to groundwater irrigation increases the demand for agricultural labourers and hence wage rates for those who mostly live below the poverty line. Both increased affordability of foodgrain and wage rates help the rural poor to cross the poverty barriers. However, the importance of groundwater has not been recognized by studies focusing on rural poverty in India. Since groundwater irrigation is proved to be prominent in increasing the production of crops, it is likely that the impact of it on rural poverty would also be significant. In this study, therefore, an attempt has been made to examine the nexus between groundwater irrigation and rural poverty using state-wise cross-section data covering five time points: 1973-74, 1977-78, 1983, 1987-88 and 1993-94. The study shows that there is a significant inverse relationship between the availability of groundwater irrigation and the percentage of rural poverty at all five time points. The results suggest that public policy should focus more on developing groundwater irrigation, without harming the environment, through a strong rural electrification and institutional credit support wherever possible to reduce rural poverty in a sustained manner. Copyright (c) 2007 John Wiley & Sons, Ltd.