ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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India s Capital Market Growth-Trends, Explanations and Evidence

Trends, Explanations and Evidence R Nagaraj This study, first, documents India 's capital market boom, and its proximate causes. What does it mean for the economy and private corporate sector? It is largely disintermediation: household sector substituted 'shares and debentures' for bank deposits, and corporate sector securitised its debt. There is no association between growth rates of the capital market mobilisation and aggregate saving rate, corporate physical investment and value added. Long-term decline in the contribution of internal finance to corporate fixed investment and in profitability in 1980s are noted, despite a fall in ratio of corporate tax to gross profit. The study concludes by raising some questions.

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