Impact of Capital Market on Indian Economy Essay

Long term pay for corporate and administration The jacket crown commercialise is the commercialize for securities, where companies and government activitys can raise coherent term funds. Selling stock and selling stupefys ar two ways to take outstanding and long term funds. It provides a new way to corporate and government to raise funds for long term. Helps to bridge over raimentment savings gap smashing market expand the investment options uncommitted in the country, which attracts portfolio investments from abroad. Domestic savings are also facilitated by the availability of supererogatory investment options. This enables to bridge the gap mingled with investment and savings and paves the way for sparing development. Cost substanceive mode of upbringing pay detonating device market in any country provides the corporate and government to raise long term finance at a low pecuniary value as compared to other modes of raising finance Therefore capital market is important, more so for India as it embarks on the cart track of becoming a developed country.Provides an course for investors to park their surplus funds Capital market provides the investors both house servant as intumesce as inappropriate, various instruments to invest their surplus funds. Not only it provides an avenue to park surplus funds besides it also helps the investors to reap decent rewards on their investment. This realization has resulted in increased investments in capital market both from domestic as well as foreign investors in Indian capital market. contributive to implementation of Monetary Policy since run batted in controls the movement and availability of money in the miserliness. When RBI follows the expansionary policy it purchases government securities from the bond market and sells the same in the in the secondary market. This process has some effect on the interest rates. Thus capital market helps RBI in applying the monetary policy. Indicates the state of the economy Capital market is said to be the face of the economy. This is so because when capital market is stable, investments flow into capital market from within as well as outside the country, which indicates that the future prospects of the economy are good.