The Impact of Stock Market on Growth of Industry in India during Post Reform Periods

Abstract

The stock exchange facilitates the industrial growth by providing finance for the enterprises. A well developed and ably regulated stock market facilitates sustainable development of the country in general and industry in specific, by providing long run funds in exchange for financial assets to the inverters. It creates market for company’s shares. It also helps in increasing the esteem and status of the company. The stock exchanges also promote the company by creating public interest in it with additional fund by means of issuing new shares or other securities. Industrialization or perish is the development mantra Sir M Visvesvaraya gave to India. But the path to industrialization is not an easy path, It requires lost of infrastructures including that of finance. The growth of the Corporate Industrial sector, apart from its own savings depends on the inflow of financial resources into it. The importance of financial sector to industrial growth as well as economic growth is debated by various economists. Some economists like Robinson (1952), Lucas (1988) do not consider financial system as important tool for economic growth. BSE is the biggest stock exchange of India. It represents the stock market development of India. The turnover of Bombay stock exchange at cash segment was 45,696 Crore in during 1992-93 which increased to 13,38,225 Crore In 2021-22. The market capitalization of BSE was 3,23,363 Crore in 1991-92 which increased to 2, 64, 06,501 Crore in 2021-22. Sensex which reflect the pulses of stock market was 1842 points in 1991-92 which increased to 55775 points in 2021-22. And industrial production which determine the economic growth of Indian economy was 3,25,150 crore in 1991-92 which increased to 37, 49,971 crore in 2021-22