The Indian Capital Market is a highly dynamic sector. A number of companies and firms are present in the domestic capital market and a number of activities have been conducted in this sector. The issue of capital market in India, however, is not as favorable as other countries. Even the Indian market has not been able to develop into an innovative market.
In India, the real estate sector is considered to be the mainstay of the capital market. Apart from this, the internet technology is also a vital industry. However, many doubts about the reliability of the equity market still linger in the minds of the investors in India.
There are many reasons why the Capital Market in India is not as favored as other developed markets. One of the major factors is the difficulty in financing the capital formation. This is because the monetary policy of the country is not suitable for banks and money granting companies. Another major factor is the government’s inability to facilitate financial inflow to the capital market.
Financial crisis and inflation in the country have resulted in the lower lending capacity of the financial institutions. This leads to high risks in the capital market. When compared to other developed markets, India is unable to provide investors with quick returns.
Several reasons have been cited for the reluctance of investors to invest in the capital market in India. For instance, the expectations of investors about the growth of the country is not as positive as they are made to believe. Such expectations should not be the sole basis for evaluating the capital market in India. There should be a proper analysis of the government policies and their impact on the capital market.
It is true that the finance sector has benefited from the negative consequences of the economic recession in the country. However, there are also many investors who have already decided to avoid the Capital Market in India. Why should investors shy away from investing in the country? Well, one of the most important reasons is the lack of reliable data. What do you know about the Indian Capital Market?
The media and the experts often claim that the financial situation of the market is quite excellent. On the other hand, the investors themselves state that the market is facing problems.
The experts and the media need to supply accurate data and the government must not be left behind in providing the necessary information. All the three should play their roles in helping the investors. The information provided by the authorities should also be accurate.
The government policies should be evaluated and its impact on the capital market should be analyzed. During the time of the recession, the policy of easing of monetary policy was adopted by the government. This had a great impact on the capital market.
Now that the situation has become more favorable, the government has not introduced any new investment schemes. However, the existing schemes are being used by companies as an effective way of raising funds for capitalization.
During the time of the recession, there were many companies that ran into problems and had to close down their operations due to financial conditions. These companies were a great source of information for the investors. Their data of the situation was quite accurate and these data should not be ignored.
As the Government of India does not seem to be interested in bringing investors to the capital market, the only way out for the investors in India is to look for investment opportunities abroad. At the moment, the investors have no choice but to take the risk of the capital in the domestic market.