Little is known about which factors account for dynamic change or for stagnation in India's agriculture. Though statistics at the macro-economic level suggest upward trends, not much is known at the micro level to point to a rational explanation of these changes. On the other hand, successful macro-economic policies require a knowledge of economic decision-making processes at the farm level. As a contribution to meeting this need this micro-economic study, based on 85 farms over a six-year period, was undertaken in East India. It is an empirical attempt to understand the decision-making processes of East Indian farm households, classified by farm size. The study is based on detailed cost accounting records and, using statistical sampling techniques, important planning implications for East Indian agriculture and its development are drawn. Those concerned with growth of agricultural economy in a developing country may also find interesting the method and approach used in the study.