This study analyses the relationship between access to groundwater irrigation, agricultural development, and poverty in Godavari river basin with heterogeneous hydrogeological resource conditions, and their implications for resource governance, using primary data from 825 farm households. The analysis showed that households with access to groundwater earn relatively higher household and per capita incomes. The large farmers seemed to have better access to water resources. Although poverty headcount ratio is high among the upper reach farmers, depth, and severity of poverty is more among middle reach farmers. Land size per se is not a significant variable in determining access, but the access is conditioned by sources of non-farm income, credit facility, education and caste hierarchy. While small farmers used more water per acre for irrigation without commensurate economic productivity, the differences in their economic productivity in comparison to large farmers was found to be associated with inequality.