What explains the rise of sustained inequality, and what role does technology play in it? We address this question by examining a large-scale natural experiment: the construction of the world’s largest geographically contiguous irrigation infrastructure in British-era Punjab. Between 1880 and 1940, the British colonial administration established an extensive network of perennial canals across the Punjab plains, transforming vast tracts of previously agriculturally insecure or barren land into fertile, irrigated farmland. This technological shock facilitated a shift from rain-fed to irrigated agriculture, reshaping the region’s economic and political landscape. To assess the long-term impact of canal irrigation on wealth inequality, we utilize a highly granular dataset encompassing 12 million households across 40 thousand village hamlets. Employing a spatial regression discontinuity design (SRD), we adopt two gravity-driven approaches to measure canal exposure. The first compares settlements just inside the canal command area boundary to those just outside it. The second, following Asher et al. (2022), contrasts settlements topographically situated just below canals with those at slightly higher elevations. Both methods reveal a consistent pattern: while canal-exposed village hamlets exhibit higher agricultural productivity today, they also experience significantly greater land and asset inequality. Furthermore, using a unique hand-collected database on political families, we demonstrate that canal-irrigated regions exhibit greater political entrenchment among historic landed elites. Our findings suggest that while canal irrigation catalysed Punjab’s agricultural development, it also entrenched wealth inequality and concentrated political power within a narrow rural elite.