India’s economic growth has slowed for the fifth consecutive quarter, as rising interest rates and paralysis in the scandal-plagued government deterred corporate investment.

Asia’s third-largest economy grew a weaker than expected 7.8 per cent in the fourth quarter of the country’s financial year – its slowest pace since late 2009. For the full year to March, India’s growth came in at 8.5 per cent, just below the government forecast of 8.6 per cent.

Investment growth for the year was a meagre 0.4 per cent, evidence that companies are feeling the pinch from rising interest rates as well as numerous bottlenecks delaying projects. With the Congress-led government engulfed by a telecoms corruption scandal and distracted by just-concluded state assembly elections , policy-making and project approvals have virtually ground to a halt.