India was a relatively late reformer. It was only in 1991 that a consistent liberalisation and reform programme was introduced. This paper investigates the effects of these macroeconomic and policy changes on the welfare of children in India generally, and in Andhra Pradesh, an actively reforming State in south India, in particular. Since it is impossible to identify clear and uniform causal relationships between policy changes and child welfare, the paper discusses a number of mechanisms through which reforms could have an impact on the rights and capabilities of children in India. These mechanisms are of four different kinds: a) some sectoral policies may have a direct effect on children’s rights and capabilities; b) economic policy changes may affect household livelihoods, and thereby indirectly the welfare of children in these households; c) some policies are likely to have an effect on the wider administrative and economic conditions (systems of governance, availability of government funds, etc.), which may impinge on the quality of government services and on child welfare; and d) the reforms may influence social norms, lifestyles and aspirations of people, with consequences for child welfare. Each of these mechanisms is elaborated, and several hypotheses linking reforms with welfare of children are discussed. The paper ends with some suggestions for further research.