How does a graduate student judge if one is slacking off? As a third year graduate student (theoretical physics) I need to find out methods to understand if I am doing well or not, am I making progress or not, am I putting in enough effort or not? 

How do I judge/measure my performance? 



Of course a primary skew in my situation is that I found an advisor only towards the end of my second year of PhD. (..before that I was working in other groups on topics which I didn't like at all..)
It's a good question, and one that's rather difficult to answer. I'll say a few things though.


being able to judge your own level of progress and evaluate yourself honestly but fairly is a crucial part of your development. After all, you won't have an advisor for very long, but you'll be a researcher for a long time. So it's good that you're asking this question
Research has many phases, and to evaluate your progress it's important to recognize which phase you're in. 


in an exploratory phase where you're looking at different topics to see what might be worth pursuing, you should be reading a lot. A plausible metric here could be whether you're reading something every day, and if you're getting a sense of familiarity with the literature (you know citations without having to look up the bibliography, you keep encountering papers you've read before, and so on)
when you are working on a particular problem, do you have an idea that you're trying ? If not, what are you doing to search for the next idea ? do you have concrete tests of whether the idea is going to fail or not ? If you're thinking concretely and constructively, then you'll automatically make progress (notice that I'm not talking about how long it takes, but rather whether you see paths to progress)
when you're writing up work, are you methodically identifying things that need to be edited/cleaned/removed, and are you spending enough time each day working on these. When there's a lot of grunt work to do, time spent is a good measure of productivity. 



Conversely, students (and researchers!) often become unproductive when:


they don't know what to do next, and don't know to ask, or how to find something to do next
they have things to do next, but are overwhelmed/fearful, and avoid doing them, or fritter away time in busy work (getting the exact right font for the title, for example)


The trick is not to get caught up in doing things at a certain rate, or worry about the large-scale,  but rather ensure that you always have something to do next. If you don't, that's when you go talk to your advisor.