It is bad news for many and good news for some. For all the rate sensitive sectors like housing, finance, auto and above all real estate, the monitory tightening by Reserve Bank of India could well be the last straw. These sectors were already facing challenges owing to the high rate of inflation. Now, the pressure on them, especially the real estate sector is bound to increase.

The Commercial Banks might take a cue and raise their lending rates further. The fund managers would now be thinking twice to pour cash into the real estate.

It was expected that the RBI would make a few minor corrections here and there to cool the rising inflation. None would have expected that it would raise the repo rate (the rate at which it lends to commercial banks) by 50 basis points and the CRR (the percentage of deposits that banks need to set aside as reserve) by 25 basis points. This is an unexpected aggressive stance. The fallouts could be far reaching.

The RBI has also revised the GDP growth projection. It has now set it at eight per cent. "Exaggerated bearishness is as dangerous a exaggerated bullishness," says the learned RBI Governor. I feel the latest move will very badly affect the already slow credit flow. Over emphasis on bringing down the inflation will generate more economic problems that what it hopes to solve. I wish the RBI had a clear-cut stable monitory policy. therefore that it should be telecast without any further delay