The localized-orbital model with configuration interaction is extended to include the inductive effect of the substituent on the electrons of the hydrocarbon. The energies and wave functions of the electronic states of some aminobenzenes, some nitrobenzenes and some nitroanilines have been calculated and from these the mesomeric dipole moments and the oscillator strengths of the spectral bands have been obtained. Only one empirical parameter per substituent is required in the calculations and good agreement with experiment is obtained. The theory is used to explain the spectral changes resulting from the steric twisting of the substituent groups relative to the benzene ring in nitrobenzene, N,N-dimethylaniline and para-nitro-N,N-dimethylaniline. Calculations have also been made on the lowest triplet states of aniline, nitrobenzene and para-nitroaniline. The delocalization of electrons between the substituent and the hydrocarbon is found to be much less in these states than in the first singlet excited states.