The Indian Capital Market: An Overview of Its Role and Challenges

Abstract

The capital market is responsible for coordinating all transactions involving the acquisition of money and lending of money over short, medium, and long terms. It is necessary for every organisation, including public enterprises and governments, to have consistent funding over the duration of an activity. The majority of the funding comes from the federal government, with additional contributions coming from banks, industrial finance groups, private investors, and institutional investment. The contributions made by individuals to investments are equally vital. Primary markets and secondary markets are the two components that make up the capital market. In order to function efficiently, the cash market requires participation from the stock market. There are still significant socioeconomic disparities, people who are illiterate, and people who are poor in India, despite the country's fast economic expansion. Even though India's economy is expanding at a rate that has never been seen before, these problems continue to exist. In order for the stock market to revive, various reforms will be required. This research intends to construct a market hypothesis in addition to addressing the issues that the Indian capital market is now facing. Additionally, it offers improvements in the efficiency of the capital market.