http://online.wsj.com/news/articles/SB10001424052702304049704579321762793169406
Prices of wholesale goods are looked at as a very important indicator of inflation for India. The inflation on those goods is finally coming down. That is a good sign for India's economy as they were in a state of stagflation for a which means that inflation was rising but the economy was plateauing. The inflation rate is still much higher than the Reserve Bank of India would like to see. The reserve bank would like to see less than 5%. Many in India hope that the bank will take this as a good sign and not raise interest rates at this months meeting.
I belive that the Reserve Bank of India needs to look at its own actions in dealing with this. Inflation should not continue to rise during a downturn. That points to worse problems within the economy.
This is definitely a good sign for India's economy. For a while India was trying to use inflation as a tool to promote economic growth, but it only ended up lowering consumer's quality of life as they're money's purchasing power decreased. Indian policymakers should certainly consider lowering interest rates even more to combat this problem further.
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