The BCI stood at 53.6 in the previous quarter (July-September).

"It is obvious that industry's outlook during the (December) quarter has been poor, but hopefully 2012 would improve sentiments and outlook," Director General Chandrajit Banerjee said.

The BCI survey, conducted on 250 companies, revealed that majority (37.2 per cent) of the respondents expect Gross Domestic Product (GDP) growth rate to moderate to 7-7.5 per cent for the fiscal, while 23.4 per cent expect it to be less than 7 per cent.

On inflation, 46.8 per cent of respondents expect average inflation to be above 9 per cent and 35.8 per cent expect it to be in the range of 8-9 per cent in 2011-12.

"...as we start seeing some positive developments, including moderating inflation, a more accommodative monetary stance and hopefully a growth oriented budget (is expected)," Banerjee said.

The survey said the global economic crisis has taken a toll on exports from the country. It added that a dominant 75.9 per cent of the respondents experienced an increase in input cost as a consequence of the fall in the value of the rupee.

High fiscal deficit, followed by surge in imports, inadequate skilled labour and stagnancy in reforms are the top business concern of most firms, it said.