This paper will attempt to understand the trajectory of economic growth initiated in Gujarat when it was carved out as a separate State in 1960. The time frame chosen for study is between 1960 to 2001, i.e, the period before Mr. Narendra Modi’s tenure as the Chief Minister of the state. The first section will present an overview of the state’s activities initiated through its actors and institutions in harnessing Gujarat’s economy during this period. Economic fortunes depend much on social and political orchestrations within a state; Gujarat’s economic development must also be understood in context of its social and political realities. The second section will look at the kind of state that emerged in Gujarat amidst these realities, and its influence on the economy. Finally, it will be argued that by resolutely pursuing capitalist development since its formative years, State played a central role in enhancing Gujarat’s economy.