The shortage of physical capital is often seen as the crucial constraint to growth in less developed countries (LDCs). Thus many development plans are based on the aggregate Harrod-Domar model where the growth of the economy is seen to depand only on the availability and the productivity of capital. A corollary of such a capital-centred approach to development is that the capital plant and machinery installed are utilized to the full. However, recent studies claim that capital under-utilization exists on a massive scale in manufacturing in LDCs and raise the possibility of a parabox in capital usage in capital-scarce LDCs. The purpose of this paper is to show that the extent of the under-utilization may have been exaggerated because of errors in the measurement of capital utilization.