The paper provides a welfare comparison between China and India. China outperforms India as a whole, but the gap is evidently being reduced. The preliminary results show that India has more regional variations. After controlling for state effects, however, economic development displays a pronounced effect on the improvement of welfare indicators in India, whereas in China, most variations are correlated with income differences across provinces. Another interesting finding is that over time, the income effect on social indicators is diminishing in China, calling for more alternative approaches. Our analysis strongly suggests that in India, state-level social policies play a key role.