Role of capital market in indian economy

Risk management of investing in corporate securities is under active and extensive discussion among academicians and capital market operators.

Growth of Entrepreneurs Since s, there has been a remarkable growth in the number of entrepreneurs. The small investors who were not interested to buy securities from the market are now showing preference in favour of shares and debentures.

Securities market provides the platform for those financial instruments that are transferable by sale. Countries with well-developed capital markets experience higher economic growth than countries without. Derivative trading is permitted on two stock exchanges in India i.

Role of capital market in indian economy

Another 6 banks were nationalised in Promotion Of Industrial Growth The stock exchange is a central market through which resources are transferred to the industrial sector of the economy. The twin features of reasonable return and liquidity in stock exchange are definite incentives to the people to invest in securities.

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Raising Long-Term Capital The existence of a stock exchange enables companies to raise permanent capital. The process of selling new shares to investors is called underwriting.

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The Role of the Capital Market in the Economy