India's economy grew below expectations at 4.7 % in October-December on falling output in the manufacturing sector, making achievement of 4.9 % GDP expansion in 2013-14 a tough task.
Meanwhile, growth in the key infrastructure sector slowed to 1.6% in January from 8.3% in the same month a year ago due to poor output of coal, petroleum refinery products and natural gas, adding to the concerns of industry.
Worried over 1.9% contraction in the output of the manufacturing sector, India Inc stepped up its demand for a rate cut by the Reserve Bank of India (RBI) to boost demand and spur growth.
The manufacturing sector had grown 2.5 % a year ago, according to official data released here by the Central Statistics Office (CSO).
The manufacturing output contracted 0.7 % for the first nine months of the financial year.
The country's gross domestic product (GDP) had expanded 4.8% in the July-September quarter and 4.4% in April-June.
Growth in the first nine months (April-December) was 4.6%.
The economy must expand by 5.7 % in January- March to achieve estimated GDP expansion of 4.9 per cent in 2013-14.
Prime Minister's Economic Advisory Council Chairman C Rangarajan hoped that growth would be strong enough in the fourth quarter to achieve 4.9 % mark. He termed the third quarter performance as "a little below expectation".
Expressing concerns over sub-optimal output in mining and manufacturing sectors, CII Director General Chandrajit Banerjee suggested that with inflation on the wane RBI should now ease monetary policy.
On industry's demand for a rate cut, Rangarajan said: "That would depend on inflation numbers, if inflation continues to trend downwards, it will give room for RBI to cut rates."