The second point is that even though the growth of manufacturing is up, the production of equipment and machinery is lower, but this need not be viewed all that negatively. Increase in orders for machinery means an increase in the capital stock, but under the present circumstances, the absence of orders for plant and machinery need not mean the opposite.

Indian industry has been consolidating and idle capacities in a number of industries are being taken over by the stronger players. Thus merger and acquisition activity or purchase of existing assets would result in stronger bottomlines, although there may not be any aggregate increase in capital stock.