I setup hotspot now I cannot login to the User Manager via web interface (e.g 172.16.0.1/userman) What could be the problem? Please Help me out!

And please what does y.y.y.y actually mean? my hotspot local IP address is 172.16.0.1. Is that what I should supply in place of y.y.y.y ?

/ radius add service=hotspot address=y.y.y.y secret=123456

'secret' is equal to User Manager router secret. 'y.y.y.y' is the User Manager router address. By default this is 127.0.0.1. If using a remotely located Router (perhaps via a VPN) then the IP address entered is the IP address of that remote Router. The router could be a Radius Server, or another ROS with User Manager installed.

If you're running hotspot and user manager on the same router then you can use 127.0.0.1 as the router address, otherwise make sure to specify the remote radius server's address if applicable.

Have you enabled the hotspot to use radius (under hotspot server profile)?

Have you setup a subscriber?

I suggest you look through the wiki again, you're likely to have missed a step:

http://wiki.mikrotik.com/wiki/User_Manager

To access router with HotSpot and User Manager from the local network [172.16.0.0],
you have to put public IP address of the router.