Justify the following statement.
Stock exchanges work for the growth of the Indian economy.

Question

Accepted Answer

>

> [!TLDR]
> The statement is correct. Stock exchanges channel public savings into industry, provide liquidity, help companies and government raise funds, and promote capital formation — all of which drive the growth of the Indian economy.
>
> A **stock exchange** is an organised, regulated market where already-issued securities are traded. By performing its functions efficiently, it contributes directly to economic development in the following ways:
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> - **Mobilisation of savings:** it attracts the savings of a large number of investors and directs them into **productive corporate investment**, instead of letting savings lie idle.
> - **Capital formation:** by continuously moving savings into industry, it promotes **capital formation**, which is essential for economic growth.
> - **Liquidity and marketability:** it allows investors to convert their securities into cash quickly and easily; this **liquidity encourages investment**, because investors know they can exit whenever they wish.
> - **Helps companies raise capital:** an active secondary market makes new issues (IPOs/FPOs) more attractive, so companies can raise **long-term capital** for expansion and new projects.
> - **Fair and continuous pricing:** through open, regulated trading it provides **fair prices** for securities and a barometer of the health of companies and the economy.
> - **Channel for government funds:** governments also raise money for development projects by issuing bonds traded on the exchange. …

Q.Justify the following statement.
Stock exchanges work for the growth of the Indian economy.

Concept understanding — Functions of a Stock Exchange

Q.Justify the following statement. Stock exchanges work for the growth of the Indian economy.

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Q.Justify the following statement.
Stock exchanges work for the growth of the Indian economy.

Unlock everything free for 14 days