The industrial output, as measured by the Index of Industrial Production (IIP), decelerated sharply from a whopping 12.2 per cent growth rate a year ago. Before this, industrial growth was negative in April 1993.

Industrial slowdown is set to have ramifications for the country's overall economic growth as well. The Prime Minister's Economic Advisory Council Chairman, Suresh

Tendulkar, said the panel is taking a relook at GDP figures, which it currently pegs at 7.7 per cent for this fiscal. "We are taking stock of the situation and we will revise our forecast accordingly," he said.

Crisil Principal Economist D K Joshi said, "We expect the IIP to continue to be weak till the end of the first half of the next fiscal. It might become positive, but will not recover till the end of this fiscal."

Joshi pointed out that certain 'abrupt situations' in the country like credit not being available and the uncertain global scenario could have caused the industrial growth figures to get pushed into the negative zone.

The manufacturing sector, comprising around 80 per cent of the Index of Industrial Production, clocked a negative 1.2 per cent growth rate in the month from a whopping 13.8 per cent a year ago.

Output in intermediate goods and consumer goods shrank by 3.7 per cent and 2.3 per cent from a rise of 13.9 per cent and 13.7 per cent, respectively, in October 2007.

Joshi said he expected the RBI to announce more rate cuts. "There might be need for a rate cut," he said, adding that the government has to realise that just increase in spending will not help in reviving (industry), execution has to be there.

Meanwhile, hopeful that the recent fiscal stimulus package announced by the government comes into effect soon, ICICI Bank's [Get Quote] executive director V Vaidyanathan said that the steps taken by the government to spur growth would have a big impact. "The government has emphasised that it will do more if required," he said.

On lowering interest rates further, he said that the banking system is waiting for the interest rates to come down and stabilise, adding that "we will continue to be interested in lending to the auto, mortgage (and) SME businesses".