Analyzing the Advancement of Capital Markets in India: A Research Perspective

Abstract

The Indian capital market began trading securities of East Indian companies in the eighteenth century. Since the 1890s, it has been a crucial support for the economy. The capital market plays a significant role in wealth distribution and economic development in India by channeling savings into investments. Following the New Economic Policy of 1991, the capital market has undergone substantial transformation. The Indian government and SEBI have introduced reforms to enhance stock market performance. Capital markets enable companies to raise medium- and long-term funds through individual savings, banks, financial institutions, government entities, and corporations. Households have increasingly invested in safe, low-yielding, and fixed-return financial securities. Investors should be financially literate and knowledgeable about various investment opportunities to avoid losses from unsuitable products. The capital market impacts national economic development. Foreign institutional investors stimulate the financial markets of developing countries, particularly India. This article examines types of capital markets, their history, their role in the economy, the establishment of a sustainable capital market, and the impact of COVID-19 on the Indian stock market.

Keywords: COVID-19, Indian capital market, National economic development, New economic policy.

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