1. For the Degree of
POST GRADUATION CERTIFICATE IN CAPITAL MAKETS
(PGCCM)
WITH
ICSI-CCGRT and NATIONAL INSTITUTE OF SECURITES MARKET
(NISM)
Capital
Markets
and
Economic
Growth
September 14
2015
Dissertation by
AMAN GUPTA
(amangupta1512yahoo.in)
2. Abstract
• Capital Markets are an important component of an economic development and
growth. Given the current state of economic condition, capital markets have proved to
be a saviour of Indian Economy. Indian capital markets have taken on a spree of
reforms post globalisation and liberalization of 1990s. Pre independence era was
dominated by capital controls act and the regular was less known about. When the
Indian economy opened up to the global fronts, necessary adjustments were to be
made in the legal framework of legislature. Once the framework had set up, it didn’t
take time for Indian capital markets to flourish globally and make a mark in global
index. India forms an integral part of emerging economy countries. And as per the
World Bank reports, stands to have excellent growth prospect. Capital markets have a
direct linkage to the economy of a country. As the markets become more efficient,
economy responds with positive growth numbers. It has a direct impact on the
economic framework of the nation. As the markets progress on to become more
efficient, capital allocation and resource mobilization is aided and it spurs economic
growth. Economic growth is supplemented by increasing foreign fund flows and
revenue. To cover the deficits of economy capital markets area harbinger of faith and
trust. The domestic markets so far have been quite liquid with governments bonds
leading the way and equity markets following. Globally there has been a trend in
capital markets, s markets become more efficient, and the growth trajectory of
economy improves. The GDP numbers reflect the positive economic sentiment and
give a clear indication of the growth sentiment.
.
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3. Contents:
Abstract.................................................................................................................................... i
Abstract.................................................................................................................................... i
Contents:................................................................................................................................ ii
Contents:................................................................................................................................ ii
1 Introduction......................................................................................................................... iii
2 Role of Capital Markets in the Economic Growth of India are as follows:........................iv
3 Significance Of capital markets:.......................................................................................... vi
4 Correlation Between Capital Markets Development and Economic Growth in Developing
Countries................................................................................................................................. xii
5 FIELD CHALLENGES..................................................................................................... xiv
6 Difference between money markets and capital markets.................................................. xvi
7 Difference between regular bank lending and capital markets......................................... xvii
8 Indian capital market to be in 2015 :............................................................................... xix
9 The Economic Role Of Capital Market Depth And its Drivers......................................... xxi
10 Conclusion:..................................................................................................................... xxv
References......................................................................................................................... xxvi
References......................................................................................................................... xxvi
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4. 1 Introduction
The study presents different views of the correlation between capital markets development and
economic growth and the role of institutions participating in the capital market performance.
The focus of the research paper is to study the effects of proper functioning of capital markets
and their impact on increasing the level of savings, capital investments and in locating relevant
resources for long-term financing of the economy. The existence of a proper legal and
institutional infrastructure ensures a better climate for investments and a proper assurance for
investors.
We cannot speak about modern economies without mentioning the financial market as one of
the most important subsystems of the economic system, and its impact on economic and social
processes. Strength and performance of a country's financial sector is an indicator of the
strength and performance of the overall economy of that country. Today, many countries in the
world, compare their economies based on the functioning and performance of their capital
markets.
1.1 Background and Context
Capital Markets are an important source of financing for the corporate sector and thus are vital
for economic development.
Historically, however, there has been substantial heterogeneity in terms of the size of capital
markets across countries, as well as issuers’ ability to access those markets.
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5. 2 Role of Capital Markets in the Economic Growth of India
are as follows:
The role of capital markets as a source of economic growth has been widely debated. It is well
recognised that capital markets influence economic activity through the creation of liquidity.
Liquid financial market was an important enabling factor behind most of the early innovations
that characterised the early phases of the Industrial Revolution.
Recent advances in this area reveal that stock markets remain an important conduit for
enhancing development. Many profitable investments necessitate a long-term commitment of
capital, but investors might be reluctant to relinquish control of their savings for long periods.
Liquid equity markets make investments less risky and more attractive.
Over the years, the stock market in India has become strong. The number of stock exchanges
increased from 8 in 1971 to 9 in 1980 to 21 in 1993 and further to 23 as at end- March 2000.
The number of listed companies also moved up over the same period from 1,599 to 2,265 and
thereafter to 5,968 in 1990 and 9.871 in March 2000.
The market capitalisation at BSE as a percentage of GDP at current market prices also
improved considerably from around 28 per cent in the early ‘nineties to over 45 per cent at the
end of the ‘nineties, after witnessing a fall in certain intervening years.
2.1 Scope and Objectives
A variety of work in economics, accounting and finance would have some linkages with
capital markets. Works in corporate finance have strong linkages with security markets. For
our purpose therefore, we considered works falling into any of the following categories as
those belonging to the field of capital markets: valuation of stocks and functioning of the stock
markets; valuation of bonds, convertible debentures and market for debt; new issues market
and merchant banking; market efficiency ; dividends, bonus & rights issues and rates of return;
and performance and regulations of mutual funds.
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6. Overview :
Capital markets in developing countries do not have only the meaning of mobilizing domestic
resources for financing, but also providing or attracting foreign direct investments. Capital
markets will impact on improving the mobilization of domestic resources to finance and
promote the efficient use of capital. Theoretically, financial markets affects in reduction of
dependency from bank-based system. Most of the developing countries, until very recently,
have not had a developed capital market. Even those countries that have established a market-
based system, have experienced stagnation in terms of their performance for several years as
compared to developed markets in the world.
In order to establish and develop a genuine capital market, it must strengthen its financial
institutions, such as banks, mutual funds, pension funds, credit unions, savings associations.
These are the most important institutions which can mobilize financial resources in the form of
savings by individuals, and puts them into capital markets. Capital market development,
equity market respectively, has been the main goal of the program of internal financial
liberalization, implemented by the country.
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7. 3 Significance Of capital markets:
• Allocation of Capital: One of the major economic benefits generated by development
of the Capital Markets is improved allocation of capital. The prices of Equity and Debt
respond immediately to change in market conditions and quickly embodied in current
asset prices. The signal created by the price change encourages or discourages capital
inflow to an industry/company.
• Allocation of Risk: The other major economic benefit generated by development of
the Capital Markets is improved allocation of Risk. Capital Markets facilitates
investors to earn returns based on their risk taking ability. Investors invest in high-risk
instruments either because they are less risk averse or because the new risk is
unaffected or negatively correlated with other investments in the portfolio.
• Mobilization of Savings: Capital Markets is a good channel to move idle savings to
most productive units in the economy. In any economy savings are moved to
borrowers through Capital Markets or through Banking Financial Corporations/ Non-
Banking Financial Corporations. In the first case the transaction occurs through the
exchange of securities. In case of common stock the transfer results in ownership and
in case of debt there is a contractual obligation to pay interest rate and debt. The
advantage of investing in Capital Markets is the price of the securities fluctuates in
response to change in supply and demand and can be brought and sold to third parties.
As a result, the investor usually has a good idea of what the securities are worth and
can obtain liquid funds by selling the securities. On the other hand, in the second case
the investor doesn’t have claim over the ultimate beneficiary of the funds and the price
of the claim doesn’t fluctuate in response to shift in supply and demand.
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8. Policy Making: Capital Markets play an important role in improving policy framework of a
country. This is because when policy makers embark on bad policies the equity and bond
prices tend to fall. Capital markets anticipate the future prospects of a country thus they reduce
politician’s incentives to do things that provide short-term gains, but that brings long-term
costs that will hurt the economy.
The postponement of new GAAR proposal and Retrospective taxation amendments shows
how Capital Markets impact policy making. After amendment of GAAR and Retrospective
taxation amendments in budget last year (2012) both FDI and FII inflows dropped and stock
market fell down that led to fall in rupee value and credit rating by top rating agencies.
Micro, Small and Medium Enterprises (MSME): Traditionally MSME are the ones that
faced difficulty in obtaining capital at low interest rate, but MSME sector contributes 8% of
the country's GDP, 45% of the manufactured output and 40% of our exports. It provides
employment to about 6 crore people and are the largest generator of employment in Indian
Economy.
Apart from the facts mentioned above, about the significance of Capital Markets, there is a
vast amount of empirical data that supports the importance of Capital Markets facilitating
economic growth. The view that Capital Markets is associated with superior economic
performance can be verified by looking the correlation between Real GDP VS performance of
Capital Markets in developed economies. Below is the list of superior economic performance
in five major respects in countries with good Capital Market environment.
1. Higher productivity growth
2. Higher real-wage growth
3.Greater employment opportunities
4.Greater macroeconomic stability
5.Greater homeownership
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9. 3.0.1 Structure and functions of capital markets :
Terms for holding claims set in capital markets.
A function of capital markets and contracts is to establish and provide for the exchange of
claims to assets, the income they generate and the value or price of those claims.
Trading in terms of new issues and outstanding issues of claims – Exchange of
outstanding issues represents transfer of property rights– Exchange of new issues
represents transfer of funds from savers to borrowers.
3.0.2 Types of equities
– Common stock- Last to be paid on dissolution of firm
– Preferred stock- Reduces “risks” to investor compared to common
Stock holder, but...
– Preferred stock adds constraints on the firm
– Would expect fewer issues of preferred stock than
Common stock
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10. Common stock income components
– Dividend payments- Dividends are profits distributed to owners; i.e.
Holders of stock
– Capital gains and losses- Stock price changes
3.0.3 Gowth of capital market factors:
Capital market comprises of two segment viz. primary market and secondary market.
The primary market facilities the formation of capital by the creation of the new long-
term securities whereas the secondary markets keeps floating that capital among
investor who intervene through the market for varied objectives. Stock exchanges play
a catalytic role in both the situations though, secondary market derives its source from
the primary market, it provides a ‘value-index’ to the securities. There are numerous
factors that affect the value of securities dealt in the secondary market. The
performance of the company its profitability the attitude of members/brokers of the
stock exchange the time of dealing the economic/political development, etc. are some
of the primary factors.
3.0.4 Growth of capital market in India: The following factors are responsible for the
growth of capital market in India:
Growth of multinational: The attractive equity holding of the present multinational
companies have tempted the public to participate in highly profitable business.
Growth of financial institutions: The growth of All- India financial institution encouraged
the growth of investment, resulting in growth of capital markets.
Massive publicity of financial institution: Massive advertising and publicity by financial
institution like banks, insurance companies, financial institution, government and private
agencies have resulted in the growth of capital markets. The advertising for securities, mutual
funds, etc. created a lot of response from the investors.
Merchant banking services: The growth of merchant banking service in India encouraged
the growth of many companies. Such companies also prospered due to the active support of
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11. merchant banking service. This resulted in the need for long term funds. As a result of this the
capital market received a big boost.
General awareness: There is growth awareness among the middle class and rich people about
the capital market. They invest money in primary and secondary markets.
The last few year have witnessed increasing awareness of investment opportunities among the
general public. Business newspaper and financial journal (The economic times, the financial
express, business India money etc)have made the people increasingly aware of new long-term
investment opportunities in the securities market.
Development plans of the government: Successive five year plane of the government of the
India encourage the industrial development of the country, which in turn, resulted in the
growth of capital markets.
Performance of private sector: Over the year private sector, especially group of companies
belonging to Tata’s, Birla’s, Singhanias and others, have shown good performance in term of
earnings. These companies have rewarded there shareholder in terms of liberal dividend
bounce and right issues. Such good performance also resulted in the growth of capital markets.
Growing population: The growing population of India has created a heavy demanded for
securities in the capital market. As a resulted of this a number of companies were established.
Many FERA companies are also entering the India market. The growth of industries created a
need for long term funds. This resulted in the growth of capital markets.
Legislative measures: The government passed the companies act in 1956. This act gave
considerable power you the government to control and direct the development of the corporate
enterprises in the country. The capital issues (control) act was passed in 1947 to regulate
investment in different enterprises prevent diversion of funds to non-essential activities, and to
protect the interest of investor. The act was replaced in 1992 as it was felt that the act had
become too restrictive and was hampering the growth of the capital market.
Growth of underwriting business: Mainly due to the efforts of the public financial institution
and the commercial bank the underwriting business in India has been growing rapidly. This
has contributed significantly to the development of the capital market in India.
Growing public confidence: Impressive growth performance by a large number a big
corporation has helped in building up public confidence. The small investor who hitherto
shielded away from the securities market and trusted the traditional modes of investment
(deposits in commercial bank and post offices) is now showing market presence in favor of
shares and debentures. As a result, public issues of most of the good companies are now
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12. debentures. As a result, public issues of most of the good companies are now over-subscribed
many times.
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13. 4 Correlation Between Capital Markets Development and
Economic Growth in Developing Countries.
For years, different researchers have done many studies to support with evidences or
arguments, if the establishment of capital market and its development will have or not a
significant positive effect on economic growth in developing countries.
Different research papers made, provided different results or arguments. Some studies
conducted on this topic have found that if a developing country establish a capital market, it
will contribute to positive economic growth of that country.
In these circumstances, companies will raise capital needed and individuals or households will
require investments that offer the best return rate on the capital market. Capital markets, as a
result of their liquidity, helps reducing the investment risk as a result of the ease of trading
capital, and which make the securities more marketable by reducing the liquidity risk.
However, other studies has resulted in contrary arguments or evidences, concluding that the
establishment and development of capital markets in developing countries have not
contributed positively to economic growth of those countries, but have had more negative than
positive effects, because these countries tend to have high rates of volatility on the price of
securities. These countries would do better if they use their human, institutional and material
resources in order to improve more their banking system rather than promoting capital
markets.
This hypothesis emphasizes that there is an evidence or argument in terms of the importance
and influence of the capital market development into long-term economic growth, and almost
no such argument in terms of developing countries.
Some developing countries are characterized by smaller financial system compared to the size
of their economy, with a narrower range of financial institutions, mainly dominated by
commercial banks. In these countries, the Central Bank is a "branch" of government, as a
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14. result of lack of independence of the Central Bank, which is influenced by the political process
and its role in economic development is limited.
Capital markets with the proper functioning financial institutions and well organized
regulatory system, accelerates economic development. Stock market liquidity is an important
indicator of a real GDP growth.
Capital markets influences economic growth through a number of channels such as liquidity,
risk diversification, providing information for companies, corporate governance and the
mobilization of savings. Countries with developed capital markets have shown greater GDP
growth compared with countries without capital markets. Risk index and the level of income
of a country are the best indicators of functioning capital market. The higher the risk index and
the low level of income, the more dysfunctional will be the capital market and vice versa.
Correlation between capital market development and economic growth varies based on level
of income and capitalization rate of a country. Countries with more developed capital markets
benefit more from foreign direct investments.
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15. 5 FIELD CHALLENGES
Capital market
Infrastructure
Deficient legislation
Lack of donor funding and orientation towards development of the sector
Market regulators are inexperienced and not well coordinated with bank regulators
Companies are unwilling to disclose the requirements for listing on the stock exchange
Volume of activity
Small market size
Listing and trading volumes are in small amounts
Investments in government securities to finance budget deficits are increasing as
Companies are faced with insufficient funding to finance.
Lack of investors
Still higher degree of political, commercial and market risk to foreign investors (but
Not for local investors)
Insufficient level of development of contractual savings system to produce demands
From institutional investors
Other Lack of political will to support further development of non-banking financial sector
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16. 5.1.1 Capital controls
Capital controls are measures imposed by a state's government aimed at managing capital
account transactions - in other words, capital market transactions where one of the counter-
parties involved is in a foreign country. Whereas domestic regulatory authorities try to ensure
that capital market participants trade fairly with each other, and sometimes to ensure
institutions like banks don't take excessive risks, capital controls aim to ensure that
the macroeconomic effects of the capital markets don't have a net negative impact on the
nation in question. Most advanced nations like to use capital controls sparingly if at all, as in
theory allowing markets freedom is a win-win situation for all involved: investors are free to
seek maximum returns, and countries can benefit from investments that will develop their
industry and infrastructure.
However sometimes capital market transactions can have a net negative effect - for example,
in a financial crisis, there can be a mass withdrawal of capital, leaving a nation without
sufficient foreign currency to pay for needed imports. On the other hand, if too much capital is
flowing into a country, it can push up inflation and the value of the nation's currency, making
its exports uncompetitive. Some nations such as India have also used capital controls to ensure
that their citizens' money is invested at home, rather than abroad.
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17. 6 Difference between money markets and capital
markets
The money markets are used for the raising of short term finance, sometimes for loans that are
expected to be paid back as early as overnight. Whereas the capital markets are used for the
raising of long term finance, such as the purchase of shares, or for loans that are not expected
to be fully paid back for at least a year.
Funds borrowed from the money markets are typically used for general operating expenses, to
cover brief periods of illiquidity. For example a company may have inbound payments from
customers that have not yet cleared, but may wish to immediately pay out cash for its payroll.
When a company borrows from the primary capital markets, often the purpose is to invest in
additional physical capital goods, which will be used to help increase its income. It can take
many months or years before the investment generates sufficient return to pay back its cost,
and hence the finance is long term.
Together, money markets and capital markets form the financial markets as the term is
narrowly understood. The capital market is concerned with long term finance. In the widest
sense, it consists of a series of channels through which the savings of the community are made
available for industrial and commercial enterprises and public authorities.
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18. 7 Difference between regular bank lending and
capital markets
Regular bank lending is not usually classed as a capital market transaction, even when loans
are extended for a period longer than a year. A key difference is that with a regular bank loan,
the lending is not securitized (i.e., it doesn't take the form of resalable security like a share or
bond that can be traded on the markets). A second difference is that lending from banks and
similar institutions is more heavily regulated than capital market lending. A third difference is
that bank depositors and shareholders tend to be more risk averse than capital market
investors. The previous three differences all act to limit institutional lending as a source of
finance. Two additional differences, this time favoring lending by banks, are that banks are
more accessible for small and medium companies, and that they have the ability to create
money as they lend. In the 20th century, most company finance apart from share issues was
raised by bank loans. But since about 1980 there has been an ongoing trend
for disintermediation, where large and credit worthy companies have found they effectively
have to pay out less in interest if they borrow direct from capital markets rather than banks.
The tendency for companies to borrow from capital markets instead of banks has been
especially strong in the US. According to Lena Komileva writing for The Financial Times,
Capital Markets overtook bank lending as the leading source of long term finance in 2009 -
this reflects the additional risk aversion and regulation of banks following the 2008 financial
crisis.
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20. 8 Indian capital market to be in 2015 :
The role of market regulator is also very important for the growth of a nation's capital market.
SEBI, lately as a proactive regulator, has cracked down heavily on errants without any fear.
Lots of actions have been taken against large entities mobilizing illegal money as well as and
further serious investigations as well as stringent actions are being taken cracking down
entities involving into market manipulations as well as black money mobilization into the
capital markets. The quantum of penalties too have been increased many folds.
With raise of almost 35% over the 12 months period from January 2014 to December 2014 in
the S&P, BSE Sensex; the year has been undoubtedly one of the good years for the Indian
equity markets and in 2015 it is expected the growth in coming year with more stability on
'Indian Capital Market outlook for 2015
In 2014 the mid-and small-cap indices have been even better performers with the S&P BSE
Mid-cap index gaining almost more than 50% and the S&P BSE Small-cap index rising as
high as around 70%
The Securities & Exchange Board of India (the Capital Market Regulator) in January 2014,
came out with new Regulations i.e. SEBI (Foreign Portfolio Investors) Regulations 2014,
thereby clubbing together the Foreign Institutional Investors (FIIs), Sub-Accounts and
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21. Qualified Foreign Investors.As per the statics available, foreign investors (FPIs) have invested
around $42 billion* in the Indian capital markets from January 2014 to December 2014.
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22. 9 The Economic Role Of Capital Market Depth And its
Drivers.
Financial structure and economic growth.
Theres consensus among financial economists that access to capital, as measured by financial
market depth, is an important determinant of a country’s economic development.
The ability of the financial system to improve economic welfare derives from the following
five factors:
(i) It allows for cost--‐efficient risk transfers among economic agents (e.g. Via trading or
hedging);
(ii) Banks and capital markets strongly influence resource allocation;
(iii) Financial claimholders exert monitoring and control activities over corporate decision
makers;
(iv) It mobilizes savings; and
(v) By providing payment services, the exchange of goods and services is facilitated.
Even Though these economic functions are not in doubt, their effective impact on economic
development is hard to establish.
Or to put it even more directly: the causal impact of financial development on economic
development is hard to infer.
However, Overall it could be said that there is increasing consensus among researchers that
financial development in fact causes economic development, even though reverse causality
might also exist.
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23. For instance, in a broad study over the period show that current financial depth is a good
predictor for economic growth over the next 30 years.
In order access to equity may spur innovation as – given obvious risk--‐sharing considerations
– debt is only available to a limited extent in high--‐risk projects.
As private equity markets tend to be relatively small, the availability of risk capital is
positively influenced by the size of public Equity markets.
This is illustrated most directly through the example of activist investors, including private
equity funds and hedge funds, who use their expertise to push for corporate
Change that will lead to enhanced performance and stock price growth.
Moreover, the effectiveness of the control activities of debt holders are often limited because
of conflicts of interest. And, finally, one should not forget that stocks are information sensitive
securities, while debt in many cases is not.
Hence, equity financing creates more information gathering incentives by outside investors
than debt financing does. This is an important prerequisite for effective corporate control.
9.1 Other drivers
Obviously, The retirement savings framework is an important, but certainly not the only
regulatory driver that has an impact on capital market depth, and we would also expect
technological progress to have an impact.
Therefore, Additional drivers are discussed in the following section.
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24. 9.1.1 Challenges of the Indian Capital Market
Indian Economy is the tenth largest economy in the world by nominal GDP and the fourth
largest by purchasing power parity (PPP). Following a strong economic reform post-
independence socialist economy, the country’s economic growth progressed at a rapid pace,
as the LPG policy was implemented in 1991 for international competition and foreign
investment. Despite fast economic growth, India still faces massive income inequalities,
high unemployment and malnutrition.
Following are the main challenges which act as a hurdle in the growth of capital market:
1) Inflation – Inflation is the rate at which the prices for goods and services are rising and
subsequently, purchasing power is falling. The inflation situation in the economy continues to
be a cause of concern. Despite tightening of the monetary policy by the apex of India, RBI and
other steps taken by the government, inflation continues to remain close to the double digit
mark. High international oil prices, high global food prices are some of the causes of high
inflation.
2) GDP – The growth figures for Indian economy are highly disappointing and highlight an
unmistakable downward trend. GDP is expected to grow by ~5-6% 2012-13. Sectors like
manufacturing and mining have seen a considerable erosion of growth momentum.
3) Index of Industrial Production – Weakness in industrial production trend continues to be
a point of concern for the economy. The recent IIP numbers was registered below expectation.
Weakness was seen with growth in the capital goods segment, intermediate goods segment and
consumer goods segment which slowed down drastically during these months.
4) Population – The current population of India is over 1.23 billion, making it the second
most populous country in the world after China, with over 1.35 billion people. India represents
almost 17.31% of the world’s population which is a serious concern. If the trend of growth
continues, the crown of the world’s most populous country will move on India from China by
2030. The population growth rate is at 1.58% with which it is predicted India would reach 1.5
billion mark by 2030.
5) Non uniform Tax reforms – With the non uniformity in the tax system across the states it
is a difficult task to carry out the businesses which resulted in undergrowth of the same. The
different tax rates implemented in some states across pan India is a major challenge to carry
out the business smoothly and also it accounts for a reason of increasing prices of goods and
services.
6) Foreign Policy – Foreign investment flows into India saw a dip of about 17% in the year
2010-11 over the previous year. This dip is largely on account of a slowdown seen in case of
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25. FDI. In 2009-10, FDI inflows totaled US$ 37.7 billion which was reduced to US$ 27 billion in
2010-11. Of the top 25 sectors, 15 sectors have seen a dip in FDI flows during April – Feb
2010-11, compared to the same period in 2009-10. These sectors involve services,
construction, housing and real estate, telecommunication and agricultural services, where
investment flows have slowed down considerably.
7) Education and Unemployment – 9.4 % of the population is unemployed which is yet
another alarming issue for the growing nation. The literacy rate in India is 74.04% as of April
2011 which constitutes of 65.46% females and 82.14% males. The literacy rate is increasing
but the rate of increment is low, which again is a matter of concern.
8) Poverty – About 37 % of Indian population lies below poverty line which is a very
alarming situation for a growing economy like India. The main reason for such diversity is the
uneven distribution of wealth in the economy where a handful of people are the owner of
maximum revenue and the majority of the population is too poor to even arrange for their
daily bread. The distribution of wealth in India resembles the pyramid model. The pyramid
states that the base of the pyramid is the poor people which is maximum in number, while the
high net worth people is very few in numbers which resembles to the top of pyramid. As the
wealth increases the number of people in the category decreases.
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26. 10 Conclusion:
Though it is very difficult to conclude about the capital market in short but still to maintain
the legacy it should go on like:
Indian market is a booming market; it has scope of development in sectors like
Pharmaceuticals, Retail industry, Automobiles, Education, etc. FDI should be allowed in
sectors to attract the foreign investors though keeping our own economy stable of its own and
not mostly dependent on global market. Inter and Intra terrestrial issues should be dealt with
proper policy making and divestment of PSU’s and inviting private players in sectors like
Railways, Infrastructure should be done so as to boost the overall growth of the economy and
thus the market as it is the market which drives the economy and vice-versa.
“Market and Economy are the two sides of the same coin and
cannot be separated”
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