Leading 2-0, Australia need only draw the Melbourne match to wrap up the four-match series and India face a Herculean task to keep the contest alive for the final test in Sydney next week. Rain delayed the resumption of play after lunch but Ishant kept India in the contest by removing Shane Watson for 17 before Yadav took the prized wicket of Australia captain Steven Smith for 14. Teams:
The highest successful fourth innings chase at the MCG was achieved by England in 1928-29, when they compiled 332 for victory.
Though India's batsmen have proved the equal of Australia's bowlers for much of the series, the flat MCG wicket began to show signs of uneven bounce late in the day and the hosts laboured to 261-7 at the close.
Perhaps mindful of India's first innings 465 completed earlier in the morning, Australia opening batsman David Warner said his team would seek more runs on the final day's play, which will have an extra six overs to compensate for a one-hour rain delay after lunch.
"At the moment we're pretty positive," he told state radio in a pitchside interview. "We can steer the ship from here as much as we like. We've got to bat time tomorrow and see what's enough."
Marsh showed commendable grit in compiling his unbeaten 62, seeing off India's pacemen who bowled well to remove three of his batting partners and expose the tail in the final session.
However, number nine batsman Ryan Harris, who scored a career-high 74 in the first innings, proved unflappable in his stand with Marsh, soaking up valuable time at the crease for his eight runs.
Marsh and debutant Joe Burns had resumed on 174-4 after lunch but Burns added only one run to finish with nine before being caught behind by India captain and wicketkeeper Mahendra Singh Dhoni off the bowling of Ishant Sharma.
Wicketkeeper Brad Haddin could manage only 13 before caught down the leg side by Dhoni off Umesh Yadav. Mitchell Johnson swiped at a bouncer off Mohammed Shami and holed out for 15, finding Ajinkya Rahane at midwicket.
Dhoni's move to put a leg slip behind Smith for Yadav appeared a stroke of genius when the Australian captain nicked down the leg side straight to Rahane.
Spinner Ravichandran Ashwin then had Chris Rogers playing onto his stumps for 69 late in the session.
Ashwin also dismissed David Warner after a quickfire 40 midway through the morning, trapping the pint-sized batsman in front of the wickets.
India were bowled out for 465 within 15 minutes of the start of play, losing their last two wickets for the addition of only three runs. Johnson took both of them, finishing with 3-135, while fellow paceman Harris ended with 4-70.
Australia: David Warner, Chris Rogers, Shane Watson, Steven Smith (capt), Shaun Marsh, Joe Burns, Brad Haddin, Mitchell Johnson, Ryan Harris, Josh Hazlewood, Nathan Lyon.
India: Shikhar Dhawan, Murali Vijay, Cheteshwar Pujara, Virat Kohli, Ajinkya Rahane, Lokesh Rahul, Mahendra Singh Dhoni (capt), Ravichandran Ashwin, Mohammed Shami, Ishant Sharma, Umesh Yadav.
Leading 2-0, Australia need only draw the Melbourne match to wrap up the four-match series and India face a Herculean task to keep the contest alive for the final test in Sydney next week.
Rain delayed the resumption of play after lunch but Ishant kept India in the contest by removing Shane Watson for 17 before Yadav took the prized wicket of Australia captain Steven Smith for 14.