Rural poverty rankings of Indian states in 1990 were very different from 1960. This unevenness in progress allows us to study the causes of poverty in a developing rural economy. We model the evolution of various poverty measures, using pooled state-level data for the period 1957-91. Differences in trend rates of poverty reduction are attributed to differing growth rates of farm yield per acre, and differing initial conditions; states starting with better infrastructure and human resources saw significantly higher long-term rates of poverty reduction. Deviations from the trend are attributed to inflation (which hurt the poor in the short term) and shocks to farm and nonfarm output.