Spawn quality and bed substrate selection are the two most decisive factors governing the commercial viability of milky mushroom (Calocybe indica) cultivation. Eight grain substrates were evaluated for spawn production and seven lignocellulosic straw substrates were evaluated for bed preparation, each in a Completely Randomized Design with three replications. Among the grains, wheat supported the fastest and most uniform mycelial colonization, achieving complete (100%) spawn run in 8.67 days, followed by sorghum (9.33 days) and maize (10.33 days), while the pulses rajma, tur and gram were consistently the poorest substrates. Among the straw substrates, paddy straw produced the shortest spawn run (20.33 days) and pinhead initiation period (11.33 days after casing), the highest cumulative yield (1056.88 g per bed), the highest biological efficiency (105.68%) and the best economic return (net benefit Rs. 201 per bed; benefit–cost ratio 2.73:1), followed by maize straw (942.08 g per bed; 94.21% B.E.; 2.51:1). Sawdust was the poorest substrate for every parameter recorded (359.62 g per bed; 35.96% B.E.; 1.01:1). Wheat grain for spawn multiplication and paddy straw for bed preparation are accordingly recommended as the most suitable and remunerative combination for commercial cultivation of C. indica under Marathwada conditions.