Debt equity ratios came down after the late 1990s when real and nominal interest rates rose. And productivity appears to have risen. Capital seems to be used with much more care. So, financial sector reforms could have played an important role in the increase in innovation and productivity in Indian industry in recent years.
Indian industry has clearly been working hard over the last decade, which is also now evident in the attainment of very high profit growth over the last 5 years or so. Despite the favourable features which have helped Indian industry to achieve a consistently high growth in the recent years, the uncertainties about productivity trends pose a major challenge in India.