The government's projections on business growth and unemployment, along with its specific reports on prices and wages in individual companies, indicates inflationary pressures subsiding
(A) indicates inflationary pressures subsiding
Use of singular verb INDICATES is incorrect for Plural subject PROJECTIONS
(B) has indicated the subsiding of inflationary pressures
Use of singular verb HAS is incorrect for Plural subject PROJECTIONS. Moreover use of Present Perfect is incorrect
(C) indicate that inflationary pressures are subsiding
CORRECT
(D) is indicative that inflationary pressures are subsiding
Use of singular verb IS is incorrect for Plural subject PROJECTIONS. Moreover use of Present Continous is incorrect
(E) are indicative of inflationary pressures subsiding[/quote]
use of Present Continous is incorrect
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the government projections are plural therefore they need a plural verb. This explains why a is wrong
the reason why E is wrong is that the subject of the sentence, which is government projections, is not an ongoing process
. Therefore a progressive tense "" are "" is unnecessary here. A simple present tense suffices here to show that
X(( projections)), along with Y (( government specific reports )) , predicate (( simple present , indicates)) an action that is not going to continue again and again ( pressure subsiding, but will pause in the present
Also, are indicative is too wordy. Here indicative is an adjective not a main verb.

Therefore E lacks a main verb

may be i wrote too much
let me make it simple
basic gmat rule.
given a choice between simple present and a progressive tense or continuous tense
choose simple present.
Also, since indicative is an adjective and not an verb, therefore are indicative lacks a main verb.
And a subject requires a main verb (( auxillary are+ main verb )) to make a complete sentence
Hope it helps