Consequently, growth in industrial production during the year fell to 8.1 per cent from 11.6 per cent in 2006-07, mainly due to poor showing of the manufacturing sector that accounts for over two-third of the Index for Industrial Production (IIP).

The manufacturing sector managed a poor 2.9 per cent growth as compared to a high of 16 per cent in March 2007, followed by a 3.7 per cent growth in electricity.

The slowdown in the industry could have a marginal effect on the overall growth of the economy, which is projected to grow by 8.7 per cent. This coupled with a 7.61 per cent inflation in the early part of current fiscal could impact the demand, analysts say.