This paper is the first attempt at examining the growth performance across Indian states during 2001-09, a period also marked by the global financial crisis. We report four key findings. First, consistent with the fact that the decade was the best one for Indian macroeconomic performance, growth increased across almost all major states in 2001-09 compared to 1993-2001. Second, nevertheless, we continue to see the phenomenon of divergence or rising inequality across states: on average the richer states in 2001 grew faster in 2001-09.