The study looked at how changes in interest rates affect the economy in India. It found that when interest rates go up, it takes at least three quarters for the economy to react. Inflation also takes about seven quarters to change. Inflation tends to stick around once it starts, no matter where it came from. The impact of exchange rates on inflation in India is not very strong. The main focus of India's monetary policy is controlling inflation and stabilizing the economy. Recent policy changes have raised interest rates, but more tightening might be needed to keep things stable.