The capitalist state is supposed to create conditions for capitalist accumulation and maintain the unity of the society by pacifying the exploited classes. Yet, the state policies which have precisely these objectives fail. Why? I suggest that an important part of the answer lies in state form. I pursue this theme by looking at the land-reform policy of the Indian state. The land-reform policy happened to be one of the ways in which the postcolonial Indian state tried to create the conditions for capitalist development. But the democratic form of the state and the class alignment in the society set some limit within which the state had to work, and in particular, conditioned the form that the policy took. In short, the policy became bureaucratic as opposed to popular, and also entailed the mediation of market relation. This form of the policy was not what was struggled for by the lower classes. Yet, the state triumphed in imposing this form of the policy. To the extent that the policy failed to benefit the lower classes and to remove the fetters on capitalist development effectively, this was because of the form of the policy. However, the state has not failed equally everywhere. With a different parallelogram of class forces and thus a different context of the state action in particular States than that which generally existed at the national level and in most States, the outcome of the policy was, to some degree, different there. Statistical and qualitative analyses are presented to support this claim.