The decline in growth was witnessed in almost all segments of the economy including agriculture, manufacturing, mining and construction.
Finance Minister Pranab Mukherjee said: "GDP growth is the lowest in contemporary period. It has been substantially because of the very poor performance of manufacturing sector".
The Central Statistical Organisation (CSO) has revised the growth rate for 2011-12 to 6.5 per cent from 6.9 per cent estimated earlier. This is the lowest growth rate since 2002-03 when the economy grew by 4 per cent.
The manufacturing output slowed to 2.5 per cent, from 7.6 per cent in previous fiscal.
"Economic growth is very disappointing. The performance of the current fiscal will depend up how well the industry picks up. We believe the growth rate in the current fiscal can be between 6.5 to 7 per cent", chairman of Prime Minister's Economic Advisory Council (PMEAC) C Rangarajan said.
A worried industry stepped up the demand for reduction in interest rates by the Reserve Bank in its mid-quarter credit policy to be announced on June 18 to boost growth.
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CII Director General Chandrajit Banerjee said the government and the RBI should take "immediate and bold actions" to step up growth.
Disappointing GDP numbers pulled down BSE Sensex by over 140 points to 16,169, while rupee touched a new low at 56.50 to a dollar amid concerns over sovereign debt issues in euro zone countries. (MORE)