Economic Development of India Essay Example for Free

Economic Development of India EssayThe ceiling food grocery is the market for securities, whereCompanies and governments can ascension spacious-term property. It is a market in which money is lent for periods longer than a year. A nations capital market includes such financial institutions as banks, insurance companies, and stock ex transposes that channel long-term enthronement funds to commercial and industrial borrowers. Unlike the money market, on which lending is ordinarily short term, the capital market typically finances fixed investments like those in buildings and machinery. Nature and ConstituentsThe capital market consists of number of individuals and institutions (including the government) that channel the supply and demand for longterm capital and claims on capital. The stock exchange, commercial banks, co-operative banks, saving banks, development banks, insurance companies, investment trust or companies, etc., are heavy constituents of the capital markets. The capital market, like the money market, has three important Components, namely the suppliers of loanable funds, the borrowers and the Intermediaries who deal with the leaders on the one hand and the Borrowers on the rising(prenominal). The demand for capital comes generally from agriculture, industry, trade The government. The predominant form of industrial organization developed Capital Market becomes a unavoidable infrastructure for fast industrialization,and hence its important for the economy because india is a land if agriculture where more than 70 % of population depends upon agriculture and as India is also an developing nation so,industrialization is moldiness necessaryIn this matter we have discussed that the development of stock market must contributes to economic growth two directly and indirectly. consequently stock market plays an important role in the economy of a country. Following the direct channel, we army that market liquidity has a positive impact on g rowth and indirectly market size of it affects investments which must affect growth of the country. Security markets also play a crucial role in economic growth and financial stability. The primary advise of security markets is to serve as a machine for the transformation of savings into financing for the real sector, and hence constituting an alternative to bank financing.Recent local and worldwide studies show that there is a positive correlation between the developments of stock markets and economic growth. Stock markets must be very expeditious in the allocation of capital to its highest-value users. These markets also help to increase savings and investment, which are essential for economic development. If an equity market is informationally inefficient then investors face difficulties in choosing the best investment, because information on corporate performance is slow.Role of Securities Markets in Economic DevelopmentThe increasing denseness of terms on both domestic a nd international loans, the urgency of mobilizing domestic resources by means other than dent finance has been greatly identified. The alternative to debt finance, of course is equity market. Capital market refers to the market for long and medium term funds for the business enterprise. It can be divided into securities and non-securities market. Securities market in eject may be divided unto the markets for primary issues and markets for secondary trading of the issued securities. In the secondary market, the existing securities change from the investor to another.There is no additional flow of funds for investment purposes in a secondary market it only provides liquidity and marketability to the existing securities. A secondary market is very essential for a new issue market to develop. The secondary market can play most crucial functions in the whole step of economic development by the promotion of savings and investment and efficient allocation of finds among the users. The se curities market offers both investors and issues a broad spectrum of investment alternatives, which can help increase the level of both savings and investment. An efficient capital market can play the crucial role in mobilizing domestic savings for the purpose of investment