The Political Economy and Development of India (PEDI) proposes what is now a very well-known hypothesis about the reasons for the low-growth regime that India experienced from the 60s to the early 80s - interest-group politics in a democracy leads to populism and subsidies, choking off resources for accumulation through public investment in infrastructure. This political economy of constraints, according to Bardhan, seems to have blocked the economy’s escape from a low-level equilibrium trap of low growth. This chapter looks at a part of Bardhan’s argument, namely the relationship between subsidies and growth. The chapter studies the patterns of growth in income per capita and subsidies over the period 1980–81 to 2013–14 and finds, contrary to PEDI, that both economic growth and subsidies increased. Put together, these trends do not provide evidence in favour of the ‘Bardhan subsidy hypothesis’ that the subsidy Raj was the most important binding constraint to economic growth in the 1980s.