Industrialization has now been accepted as a necessary step towards economic progress in India, but more controversy surrounds locational policy for industry-the centralization-decentralization issue. This problem, and the economic, social and political factors which affect locational decisions, can be illustrated by an examination of industrial growth in Rajasthan and Madhya Pradesh, two states in Central India. In a survey of large-scale industrial units in these states, data were collected on locational decisions and dates of establishment. Four periods of industrial development can be defined. The role of British enterprise and the part played by Indian princes were important before Independence. Since 1948, government policies have affected industrial location and growth, and public sector projects have been established. Present problems of power shortages, the scarcity of certain raw materials, and deficiencies of infra-structure should be overcome in time. The paper also considers the governmental role in establishing and promoting industrial development, and the patterns that will emerge if the Indian government's policy of balanced regional development is put into effect. INDUSTRIALIZATION has now been largely accepted as a necessary step towards economic progress in India. There are several arguments supporting this conclusion. As with many of India's social and economic problems, the issue is immediately complicated by her enormous population. All attempts at progress are burdened by sheer weight of numbers and any small success is immediately swallowed up by the annual growth rate of 2.2 per cent, which adds 12 million to India's population every year. The 1961 Census of India gave a population of 439 million; the total is now estimated to have passed 5oo million. Of these, 70 per cent are dependent directly on agriculture for their livelihood. Few areas remain where land can economically be brought under cultivation by irrigation, clearance or reclamation and, in view of the high rate of underemployment and the uneconomic use of labour in agriculture, it is unlikely to absorb a larger work-force. Besides, improvements in agricultural techniques are likely to make this sector less labour-intensive, certainly not more so. Lack of employment and economic opportunity in rural areas have already occasioned massive migration to cities, even though unemployment in urban areas has been estimated at 10 per cent of the labour force, rising to I8 per cent in the metropolitan centres of Bombay, Calcutta, Delhi and Madras. Underemployment in urban areas added another I I per cent so that just over one-fifth of the workforce was not fulfilling its work potential.1 Employment must be found for this large and growing pool of labour. The development of industry would appear to provide not only a source of work but also of profit to the economy in general, which is beset by difficulties with foreign exchange that make tight import controls necessary. India lacks capital, entrepreneurship and technological skills, and labour, albeit largely unskilled, is a major and abundant resource of which she must take full advantage if economic progress is to be achieved.