Abstract
This chapter discusses capital formation and its financing in the private corporate sector in India. The private corporate sector in India comprising all joint stock companies has been playing an invaluable part in the development of industries. The formation of joint stock companies goes back to the middle of the nineteenth century and since then the sector witnessed a continuous growth that accelerated substantially during the first two plan periods (1951-1961)—the total paid-up capital of all non-Government companies together that was about Rs. 99 crores in 1917-18 increased nearly eight-fold to Rs. 775 crores in 1950-51. By the end of the first plan period in 1956 the paid-up capital amounted to Rs. 958 crores and it expanded further to Rs. 1,200 crores by the end of the second plan period. The private corporate sector comprises mainly non-Government public limited companies and private limited companies, and the basic data on the operations of these companies are provided by the annual studies on company finances made by the Reserve Bank of India and published from time to time in their monthly Bulletin.
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