“Capital Goods” sector comprises of plant and machinery, equipment / accessories required for manufacture / production, either directly or indirectly, of goods or for rendering services, including those required for replacement, modernization, technological up gradation and expansion. It also includes packaging machinery and equipment, refrigeration equipment, power generating sets, equipment and instruments for testing, research and development, quality and pollution control. Capital Goods sector has multiplier effect and has bearing on the growth of the user industries as it provides critical input, i.e., machinery and equipment to the remaining sectors covered under the manufacturing activity. The capital goods industry contributes 12% to the total manufacturing activity which translates to about 1.8% of GDP. If the goal of achieving 9% growth in GDP during the 12th Five Year Plan has to be realized, then it is important for the manufacturing industry to grow at least by 11-13% per annum. This further requires that the Capital Goods sector, which is considered to be the core of manufacturing, should grow at around 17-19%.