Vijay's Vision

ROLE OF CAPITAL MARKETS IN       ECONOMIC DEVELOPMENT WITH SPECIAL REFERENCE TO INDIA               -   Dr. S. Vijay Kumar     Capital market means the market for all the financial instruments - commercial, industrial and government securities. It deals in both debt and equity. The Central and State governments raise money in the capital market, through the issue of government securities. It refers to all the institutes and mechanisms of raising medium and long-term funds, through various instruments available like shares, debentures, bonds etc.       Corporates both in the private sector as well as in the public sector raise thousands of crores of rupees in these markets. The government, through Reserve Bank of India, as well as financial institutions also raises a lot of money from these markets.  Examples of well-developed markets are – The Global depository and American depository. There are two important operation carried on in these markets: 1. The raising the

                                                                                                                   - Dr. S. Vijay Kumar     The Securities Contracts (Regulation) Act, 1956, has defined Stock Exchange as an "association, organization or body of individuals, whether incorporated or not, established for the purpose of assisting, regulating and controlling business of buying, selling and dealing in Securities". Stock exchange as an organized security market provides marketability and price continuity for shares and helps in a fair evaluation of securities in terms of their intrinsic worth. Thus it helps orderly flow and distribution of savings between different types of investments. This institution performs an important part in the economic life of a country, acting as a free market for securities where prices are determined by the forces of supply and demand. Apart from the above basic function it also assists in mobilizing funds for the Government and