Section 1 of this report develops the thesis that while illiteracy is deeply entrenched in certain areas of India, it is also confined to specific pockets of the population. Recognition of this fact should be the basis, according to the author, of literacy strategy. Section 2 provides a history of the levels of priority given to adult education and literacy in India from 1947-77. In sections 3 and 4, the author examines both the experimental one-state literacy projects known as "The Village Literacy Movement" and the national "Functional Literacy Project," which have served as a springboard for the "National Education Programme" outlined in section 5. While section 6 focuses on developing a program to meet the learning needs of India's neglected rural youth, section 7 argues the necessity of linking adult education and literacy to local and national development. Sections 8 and 9, which conclude the study, propose a decentralized, area-specific strategy that would approach problems of literacy and adult education within the context of Indian conditions. The report includes extensive data. (JBM)