Impact of irrigation on rural poverty in India: an aggregate panel-data analysis

Abstract

The main objective of this study is to quantify the marginal impacts of irrigation and selected input factors on spatial (across 14 states) and temporal (from 1970–1993) variation in the rural poverty level in India. The study uses the head count ratio measure (percent of population below the poverty line) of poverty to evaluate how the poverty level is affected by input factors: irrigation, adoption of HYVs, fertilizer application, rural literacy rate and rural road density. It was found that marginal (incremental) impacts of irrigation followed by the rural literacy rate were larger in explaining the variation of rural poverty level in India than those of other factor-inputs selected. The marginal impact of groundwater irrigation on poverty reduction was larger than that of canal irrigation, which is due to greater control in the application and widespread use of groundwater irrigation than of canal irrigation. Despite mixed findings about the impact of irrigation on poverty from past studies, we have found large-scale marginal impacts of irrigation on rural poverty in India. This quantitative information is expected to be useful for designing targeted poverty alleviation and rural development strategies that also enhance agricultural-productivity growth.