RBI (Reserve Bank Of India) the monetary authority Of India has decided to hike its lending rates, which means borrowing from the public and the private sector banks accross the nation would be very expensive. Higher interest rates would mean lower manufacturing activity. It may serve as a breeding ground for the next trade cycle ie. recession. Unemployment may rise. Purchasing power of the people may fall as they may prefer savings over spending. Real estate prices may collapse. These effects may be seen in the long run. In a mixed and a protected economy like India, this is not awesome. As of now in such a situation people should invest in tax saving (S.I.P) ex. ETF (exchange traded funds) from trusted companies like SBI Mutual funds. Also people may consider investing in the IPO’s (Initial Public Offer) to boost up the industrial activity. It is advised that investment into the bullion be avoided to protect the valuable foreign exchange of the country.