"The current economic problems are largely a result of domestic factors like excessive monetary tightening, delays and uncertainty over key economic legislations," said RV Kanoria, President of the Federation of Indian Chambers of Commerce and Industry (FICCI).
Kanoria said that project delays on account of factors, including stalled environmental clearances, problems in land acquisition, prolonged pause in reforms, and an atmosphere of unwillingness in decision-making in bureaucracy, have also led to the slowdown in industrial growth.
As per data released by the Central Statistics Office, India's economic growth slumped to a nine-year low of 5.3 percent in the fourth quarter of fiscal 2011-12.
The country's gross domestic product expanded by 6.5 percent in 2011-12, which is even lower than the 6.7 percent level achieved during the global financial crisis of 2008-09.
Top economic policy makers, including Finance Minister Pranab Mukherjee, have blamed the eurozone crisis for the current economic woes.
However, Kanoria said that the current economic slowdown was largely due to domestic factors, and urged the government and the opposition parties to act together to overcome the crisis.
"There has to be clear recognition on the part of ruling and opposition parties that we are in a crisis situation, and that all parties need to stand united and strengthen the hands of policy makers to take bold decisions and act decisively," Kanoria said at a media interaction in New Delhi.
The FICCI president suggested a 12-point action programme to address the present economic crisis situation.
To bring fiscal discipline, the industry lobby suggested that the 'government should eschew the temptations of a premature welfare state and announce an immediate moratorium on any additional expenses on doles'.
FICCI called for a cut of 200 basis points or two percent in interest rates and a cut of 100 basis points or one percent in cash reserve ratio by the central bank to ease the liquidity situation.
Other suggestions include expediting the implementation of the goods and services tax (GST), fiscal stimulus for investments through accelerated depreciation, investment allowance, scrapping minimum alternate tax (MAT) for infrastructure, foreign direct investment (FDI) policy reforms in areas like civil aviation, multi-brand retail, decontrolling diesel prices, and reforms in mining and coal sector by fostering greater competition.
FICCI also called for strengthening the framework for raising funds for infrastructure, productivity increase and agriculture marketing reforms for food security, fast-track implementation of critical polices and projects, and addressing the issue of repatriation of black money to immediately mitigate balance of payment situation.