Commercial Seed Production (CSP) in vegetables like tomato and okra is an important economic activity for farmers in the dry regions like Haveri and Gadag in Karnataka providing assured returns and additional employment. Its economic impact assessed at individual and aggregate levels based on a sample of 70 cultivators has indicated that the activity provides stability, equity in income distribution across the group and helps enhance family welfare. Undertaken mainly during the khraif season on a plot of around 0.43 ha, the farmers incur an expenditure of around Rs 49,780 / ha for tomato and Rs 38,555/ha for okra. With a seed yield of 0.493 and 5.66 quintals of tomato and okra, respectively, the farmers could realize a net return of Rs 88,338/ha from tomato and Rs 39,440/ha from okra. Being highly labour-intensive involving special operations such as emasculation and hybridization, the commercial seed production generates employment opportunities of around 415 women-days in both tomato and okra CSP. With low coefficient of variation in the range of 8 per cent price in okra to around 28 per cent for yield in tomato, the CSP could provide income stability for the dryland farmers. Measured in terms of Gini’s coefficient of income equality, the CSP of tomato and okra with a value of 0.22 and 0.24 has proved to improve income distribution across the group. By adopting a combination of two plots of tomato, one during kharif and one during rabi, with one plot of okra in kharif, CSP could fetch the highest net return of Rs 33,859/ha. The presence of surrogate water market and dwindling groundwater in the region highlight the urgent need for a policy and action points for safeguarding the social and environment issues in the highly beneficial CSP of tomato and okra.