"With demand not showing visible signs of a pick up owing to weak consumption, investment and government expenditure, the green shoots of recovery have yet to become apparent. What is worrisome is the poor performance estimated in the mining and manufacturing sectors which are in the red," CII Director General Chandrajit Banerjee said.
"The government should do more to get stalled projects off the ground, both in infrastructure and manufacturing sectors, remove hurdles in the mining sector and create a conducive environment for the revival of the manufacturing sector," he said.
India's economic growth rate in the current financial year has been estimated at 4.9 per cent, a pace faster than in the previous year, mainly on account of improved performance in the agriculture and allied sectors.
"Moderating performance of the manufacturing sector is taking a toll on the overall growth and the services sector as well. There has been a considerable loss in optimism and we urgently need to prop up growth in the manufacturing sector," Ficci President Sidharth Birla said.
Manufacturing is expected to register a contraction of 0.2 per cent in this financial year compared with growth of 1.1 per cent in the previous year.
"Poor performance of manufacturing, construction, mining and traditional services has affected the overall growth rate. Given the current state of employment intensive segments, it would be difficult to see any revival in the near future," Assocham Secretary General D S Rawat said.
For 2013-14, the CSO has projected a growth rate of 4.6 per cent in agriculture and allied sectors, up from 1.4 per cent a year earlier.
"Below 5 per cent growth is due to slowdown in the manufacturing sector. Implementation of GST will boost India's GDP by 2 percentage points. Going forward we expect uptick in growth numbers at 5.5 per cent in the next fiscal," PHD Chamber of Commerce & Industry President Sharad Jaipuria said.
The latest growth estimate of 4.9 per cent for 2013-14 implies that the pace of economic expansion improved in the second half, given that GDP grew 4.6 per cent in the April-September period.