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Question 34 of 37

Q.State with reasons whether you agree or disagree with the following statement.
The capital market plays an important role in India.

(a) Agree
(b) Disagree
Maharashtra MsbshseMaharashtra HSC (MSBSHSE) Board 2025MCQ· 4mImportance★★★★★
92% · 34/37 Questions
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Agree — the Indian capital market mobilises long-term savings, promotes capital formation, provides finance to industry, government and infrastructure, offers investors liquidity and a wide choice, and thereby accelerates economic development.

Role of the capital market in India

  1. Mobilisation of savings — it collects scattered small and large savings of households and institutions and makes them available for investment.

  2. Capital formation — by directing savings into productive investment (shares, debentures, bonds), it raises the rate of capital formation in the economy.

  3. Finance for industry and business — companies raise long-term funds for expansion and modernisation through the primary market (new issues) and can trade them in the secondary market (stock exchanges).

  4. Finance for the government and infrastructure — the government raises long-term funds through bonds and securities for development projects, roads, power and other infrastructure.

  5. Provides liquidity — stock exchanges let investors buy and sell securities easily, so investment in long-term assets remains liquid.

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