According to a recently released data, the Retail inflation in India decreased sharply in July, while industrial output growth rose to a four-month high in June.
This has brought cheer for the economy and policy-makers and has raised prospects for a reduction in interest rates.
The data showed retail inflation slowed to a record low of 3.8% year-on-year in July, significantly lower than 5.4% in the previous month, due to slowing food prices and a favourable base effect.
Industrial output growth rose 3.8% in June, faster than downwardly revised 2.5% expansion in May . The effect was led by a turnaround in the manufacturing sector, which rose 4.6% in June compared to 2.9% growth in the year earlier period. The turnaround in consumer goods and consumer durables also augured well but the capital goods sector contracted after seven months, pointing to weakness in investment conditions.