Using pooled time series data across 15 major states of India, the relationships between measures of living standards and per capita income and government expenditures in social sectors are estimated. Female literacy, infant mortality, total fertility rates and level of poverty are taken as measures of living standards. Public expenditures on education, and improvement of medical facilities are found to be more effective in improving living standards than growth in income alone. In particular, the state of Kerala is not an outlier in its achievement of impressively higher living standards, relative to other states, after controlling for government expenditures in the social sectors. These conclusions do not change after controlling for fixed effects and with application of robust estimation procedures.