India's index of industrial output (IIP), which is the most widely accepted indicator of industrial production in the country, recorded a growth rate of just at 0.1 per cent in April 2012 compared to the same period of the previous year.

The country's industrial output has fallen 3.5 per cent in March 2012. The manufacturing sector rose 0.1 per cent and electricity at 4.6 per cent while Mining registered a fall of 3.6 per cent and Capital goods fell by 16.3 per cent. On the other hand, the vibrant consumer goods sector grew 5.2 per cent but was unable to lift the whole index.

The low figures have sparked hopes that the central bank of the country might reduce its rates to boost economic growth. The deputy governor of the Reserve Bank of India (RBI), Mr. Subir Gokarn has said that the central bank has some room for reducing its key policy rates following moderation of core inflation and a fall in global crude oil prices.

The central bank had earlier indicated that its stand on monetary policy will depend on the level of oil prices in the international markets and the domestic economic growth rates. Mr. Gokarn said that the liquidity situation is comfortable in the economy citing a fall in bank's borrowing from the RBI.

India's GDP growth has fallen to its lowest level in 9 years to 5.3 per cent for the fourth quarter of the financial year till March 2012. The GDP growth for the same quarter of 2010-11 was 9.2 per cent, showed the latest data announced by the company.