Concerned at the declining industrial growth, industry chambers on Thursday suggested that lending rates should be brought down to single-digit levels.
The slowdown in industrial growth underlines the need for ensuring that the measures announced in the economic stimulus packages are speedily implemented, Ficci said in statement.
"The chamber has been pointing out that interest rates at the retail level have not yet been fully adjusted. Unless the lending rates are brought down to single-digit levels, economic recovery will take a long time," said Ficci president Harsh Pati Singhania.
During January industrial output showed negative growth of 0.5 per cent, highlighting that stimulus packages have failed to perk up manufacturing as well as mining so far.
However, Singhania said that hopefully India should see some recovery from February 2009 onwards particularly in the context of improved demand seen in sectors like automobiles, consumer durables and cement.
Assocham says continuing contraction in industrial production in the last few months is indicative of the fact that India's growth momentum is in for serious trouble.
"The fall in India's industrial output of January shows that Indian Inc has fallen under the severe pressure of slowdown at least for some time," Assocham president Sajjan Jindal said.
Jindal said that now it is certain that India's GDP growth for the fiscal would be much lower against the revised estimates and the country should accordingly prepare for it.
However, the CII said the numbers show that the decline in industrial growth has not been as sharp as had earlier been expected.
"With the decline in IIP contained within one per cent in both December 2008 and January (2009), industry is likely to manage decent growth of three per cent during the year 2008-09," the CII said.
The CII said the January data show that while the performance of intermediate and basic goods has been disappointing, there has been an encouraging turnaround in the capital goods and consumer goods sectors.