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Industry in India has grown at different rates in different periods since 1950. Policy liberalization and increased deficit financing provides the context for an explanation of the acceleration in industrial growth in the 1980s. In this thesis I develop a model of demand for industrial products using time series macro-econometric methods after first establishing that industrial prices in India are largely determined by costs. Using the Johansen Maximum Likelihood method, I formulate an overall consumption function and develop an error correction model of the demand for industrial output arising from consumption. I demonstrate that public equipment investment crowds out private investment in machinery and equipment and model demand for the purpose of equipment investment. With the help of recursive techniques, the models of consumption and investment are shown to be well specified and stable over the entire period considered, including the eighties. I contend that domestic factors were more important in increasing growth than the expansion of manufactured exports. Stagnant levels of employment provide the backdrop for an examination of productivity growth in industry. I demonstrate that a limited improvement in total factor productivity was achieved subsequent to the acceleration in output growth in the 1980s. I question the assertion that productivity growth was responsible for the acceleration in output growth and refute the related contention that liberalization engendered the improvement in productivity. I establish that capital and labour inputs are able to account for the movements in industrial output only to a limited extent and demonstrate that consideration of raw material inputs is essential to an adequate explanation of supply side dynamics. My analysis contends that changes in demand were accommodated by supply responses, which may have been aided by the relaxation of regulatory controls.