India's economic growth slid to 5.3% in the September quarter, stuck at its lowest levels in three years as it struggles to enact reforms to kick start Asia's third-largest economy.

The figures released were in line with expectations that the second quarter of the fiscal year was lacklustre.

A weakening economy complicates New Delhi's effort to create jobs for its exploding youth population and balance the budget.

It also needs to pay for costly social programmes in advance of national elections scheduled for 2014.

India is struggling with high inflation and high interest rates, coupled with a wide fiscal deficit, weak currency, and uncertain policy environment, which have hit both consumption and investment.

Economists said the country is marred by the investment slowdown. They pointed out that the investment story has not improved in the last two and a half years, and is worsening each and every quarter.

New Delhi has been at pains to attract foreign capital and avoid a ratings downgrade, announcing ambitious reforms that are now foundering in Parliament.

The ruling Congress Party's effort to ease restrictions on foreign investment and allow companies like Wal-Mart to open supermarkets here sparked fierce resistance from opposition politicians, who shut down Parliament over the issue, casting further doubt on the government's ability to execute policy reforms.

While New Delhi's initiative on reform has boosted the stock market, economists are divided over how much the policy overhaul will help the real economy in the near term.

Even if New Delhi manages to push through liberalisation measures it is not clear whether foreign investors will take advantage of greater access to industries such as aviation, retail and insurance given India's other looming uncertainties.

India's economy grew 5.5% during the June quarter, after expanding by 5.3% in the March quarter. This is the slowest pace since the global recession, which dragged India's economic growth down to 3.5% for the first quarter of 2009.