This paper reviews the theoretical and empirical literature on the relationship between institutions and long-run economic growth, with particular emphasis on sub-national variation in India. Drawing on Old and New Institutional Economics, institutions are conceptualized as path-dependent formal rules and informal norms that shape incentives, reduce transaction costs, and condition economic performance. Using a systematic narrative approach, the review synthesizes foundational theoretical contributions, cross-country empirical evidence, and state-level studies from India. While global evidence consistently associates institutional quality particularly property rights, political accountability, and state capacity with long-run growth, national-level analyses often obscure substantial internal heterogeneity. The Indian experience illustrates this limitation: despite a common constitutional framework, states exhibit wide variation in governance capacity and growth outcomes. The review highlights that institutional effectiveness depends not only on formal structures but also on enforcement capacity, administrative capability, and adaptability. It underscores the importance of historically informed, sub-national institutional analysis for understanding growth outcomes in federal and developing-country contexts.