According to the latest figures released, India's Index of Industrial Production has fallen to 4.1 per cent in February compared to 6.7 per cent in the same month in the previous year.

The index fell to 3.5 per cent during the April-February 2011-12 period compared to 8.1 per cent a year ago. Union Finance Minister Pranab Mukherjee has said that the government and the Reserve Bank Of India (RBI) will take steps to revive industrial activity in the country after disappointing figures were released.

"These figures will have bearing on monetary policy announcement scheduled for next week. The government along with RBI will take required steps to revive activity in the economy," he said.

He pointed out that the continuing uncertainty in the global economy as well as a tight monetary policy has put pressure on investments. The RBI has not changed its key lending rates since its policy review in mid-December. It had increased the rates 13 times since March 2010 in order to control the stubborn inflation in the country. The last cut in the repo rate was in April 2009.

The central bank had announced a reduction in the cash reserve ratio (CRR) by 75 basis points in March to 4.75 percent aiming to boost liquidity in the market.