"The GDP figures for first quarter clearly show that the economy continues to be in the throes of a slowdown. The concern becomes more acute when we see that at the present moment, there are no clear indications that the economy has bottomed out," CII Director General Chandrajit Banerjee said.
There are no visible signs of investment pick up as investor sentiments continue to be very low. A weak rupee, tight liquidity, high cost of funds, procedural delays, etc, are all coming in the way of an investment revival, he added.
Contraction in manufacturing and mining sector pulled down the economic growth in the April-June quarter of this fiscal to 4.4 per cent-- the lowest in past several years.
"The economy continues to tread in difficult waters as many challenges remain on the fore. Understandably, there is no perfect recipe to steer out of the current state of affairs but what we need is swift action given the volatile situation," Ficci President Naina Lal Kidwai said.
Manufacturing sector also posted a contraction of 1.2 per cent in the first quarter of this fiscal as against a decline of one cent in output in the same period of 2012-13.
"The industry fears that in case urgent steps are not taken to revive the manufacturing sector, jobs will be at stake, Assocham Secretary General D S Rawat said.
We would have to strive harder on the reform front to give a push to the manufacturing sector, Kidwai said.
Hastening disinvestment of public sector units, ensuring coal supplies to the power sector, promoting competition in the mining sector and ensuring speedy implementing of Delhi-Mumbai Industrial Corridor (DMIC) would be seen as positive developments, Banerjee said.
A coordinated effort from the Government and the RBI is required to ensure that this vicious cycle is broken, he said.
Meanwhile, PHD chamber of commerce and industry urged the RBI to cut policy rates to revive the economic growth.
"Since wholesale price inflation (WPI) scenario is stabilizing at around 5 per cent during the last many months, at this juncture rate cut is inevitable to facilitate industrial production," it said.
Besides, the farm sector output expanded by just 2.7 per cent in April-June quarter this year, only marginally down from 2.9 per cent in the corresponding period of last fiscal.
However, India Inc expects a pick up in agricultural growth on the back of good monsoons.
"With monsoons being normal, a good agricultural performance coupled with rise in rural wages would help bolster rural demand," Banerjee said.
Several other sectors including construction, power generation, hotel and transport showed marked deceleration in growth.