The role of food prices and intersectoral terms of trade in stimulating agricultural growth and effecting changes in income has been the subject of considerable controversy in India. This work reviews the debate on the role of terms of trade in relation to growth and equity and analyzes therelative impact of price and technology policies on changes in output, income distribution, and consumption for various classes in India's rural and urban sectors. It also offers a detailed discussion of the implications of policy choices, demonstrating that the largest gains for the poor with thegreatest growth effects on industry and services are obtained only when output increases with flexible prices.