"The fall in manufacturing index is worrisome as it is spread across key sectors like capital goods. As the outlook for Indian economy looks positive, we are hopeful of sustained recovery in manufacturing in the next few months," Ficci President Harshavardhan Neotia said.
Industrial production, measured in terms of index of industrial production (IIP), declined 1.3 per cent in December, mostly due to weakness in manufacturing and capital goods.
"Negative growth in manufacturing and indifferent growth in mining have got wider implications and needs to be addressed on a priority basis. The significant shrinkage in the production of capital goods shows that industrial revival is going to be one of the major challenges," Assocham President Sunil Kanoria said.
The index had registered a growth of 3.6 per cent in December 2014.
"Going ahead, we see the industrial growth remaining subdued for the rest of the fiscal, but believe that a possible revival in the rural economy could be beneficial for overall IIP," Economist at Deloitte India Rishi Shah said.
During April-December this fiscal, the industrial output grew 3.1 per cent compared with 2.6 per cent a year ago.
The decline in December has been primarily because of a massive slump in output of capital goods, which showed a contraction of 19.7 per cent in December as against a growth of 6.1 per cent in the same month a year ago.