The country's growth fell slightly to 5.3% in the third quarter, broadly in line with consensus estimates and from the second quarter's 5.5%. Quarter-on-quarter growth also slowed to 1% from 1.3%.
"There were both things to laugh and cry about in todays numbers, but overall the reading was emotionally neutral," Leif Lybecker Eskesen, chief economist for India and ASEAN at HSBC, wrote in an analysis piece after the data were released.
"We are getting close to the bottom, although we are most likely talking about a 'bathtub shaped' recovery with some bottom scraping in coming quarters."
Agriculture slowed to 1.2% from 2.9% because of the poor monsoons, but industrial output staged modest growth of 1.2%, led by mining and manufacturing.
Services' growth edged down to 7.1% from. 7.4% in the second quarter, led by construction.
Eskesen noted that net exports "were a major drag on growth, subtracting 1.3 percentage points from growth" versus -0.2 percentage points in the second quarter.
In September, the government launched a series of daring reforms such as raising prices for subsidised diesel and opening the politically-sensitive retail sector to foreign investors, sparking a rally in markets.
RBI SEEN STANDING PAT
But this was not enough to spur growth over the short term, and analysts say fundamental elements of the economy are still weakening.
"Consumption demand remains weak," said Barclays analyst Siddhartha Sanyal, noting that private final consumption expenditure grew 3.7% in the third quarter, averaging around 4.6% in the first nine months of the year, "markedly lower than the average of about 7.6% during the previous five years."
Even the strengthening sectors do not paint a rosy picture.
Growth in mining had largely to do with a favourable base effect and the sector is still held back by issues such as constraints on coal production, while the manufacturing sector, although it advanced faster than expected, is still increasing at "a very moderate pace" because of global headwinds, Eskesen said.
"Looking ahead, growth may end up moving, more or less, sideways in the near term. Growth in the current quarter will not benefit much from either policy progress or global stabilization," he said.
The Reserve Bank of India (RBI) meets on December 18 and there has been intense pressure on it to lower the interest rate to help boost economic growth. However, the bank has so far stood firm, saying its main worry was keeping inflation at bay, and analysts say there is little hope it will change its stance next month.
"The RBI is attempting to strike a balance by holding rates steady, while ensuring that the pressure on liquidity in the banking system does not become disruptive," said Sanyal.
"Unless we see meaningful downside surprises to inflation (headline or internals) in mid-December, we expect the RBI to maintain its policy stance in its December meeting."