The study investigates the Co-integration between Capital formation and Interest rate in the period of High and low growth scenarios of the economy for the period 1992-2015. We built a multivariate framework by constructing a model of Capital Formation, Interest rate and GDP Growth rate employing ARDL Bounds Test in addition to Johansen Maximum likelihood procedure. Though ARDL bound and Johansen Integration test establish a long run equilibrium relationship between Capital Formation and Interest rate in conjunction with GDP growth rate. The results of the study are not within the expectation of the popular understanding on possible casualty of the Interest rate on the Capital formation. However, the model demonstrates a surprise unidirectional reverse casualty on interest by Capital formation and GDP and justified the reason for co-integration. © Serials Publication Pvt. Ltd.