Money Market and Capital Market in India — Economics STD 12 Commerce / Arts — Question
Maharashtra BoardEnglish MediumSTD 12 Commerce / ArtsEconomicsMoney Market and Capital Market in India4 Marks
Question
Explain the problems of capital market in India.
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Answer
Following are the problems of capital market in India :
Scams : It is observed that different types of financial scams in the stock exchange have affected the confidence of individual investors in the securities market. Scams involve manipulation of larger amount of money, which results in public distrust and loss of confidence among the individual investors.
Inadequate debt instruments : There is less trading in debt securities due to narrow investor base, high cost of issue, lack of accessibility to small and medium enterprises.
Lack of informational efficiency : Indian stock markets lacks informational efficiency as compared to advanced countries.
Decline in volume of trade : There is sharp decline in the volume of trade in regional stock exchanges. This is due to investors preferring trading in securities listed in premier stock exchanges like BSE and NSE.
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