3.3.1 INDIAN CAPITAL MARKET BEFORE 1990 The starting of trading in securities wasstarted in 18th century, when buying andselling of securities of the East India Company were going on both in Bombayand Calcutta. The Bombay share brokers also came together in July 1875 when the Bombay stockexchange was formulated.
This was continued by Ahmadabad and Calcutta stock exchanges wasbegan in 1894 and 1908 respectively.The Indian capital market was not that much developed before the Independence. Thusafter independence, the Government of India appointed a new committee with an objective to study thesecurities market and which was headed by A.D.Gorwala.
. According to the reportof the committee, submitted in 1951, was led towards the centrallaws for the first time, as per that securities contracts (regulation ) Act1956 and securities contracts ( regulation ) Rule 1957 were began. Thusthese laws were gave powers to recognise stock exchanges, to approve theirbye-laws and to issue directions to the stock exchanges on their functioning and it also act as a regulative body . TheCompanies Act passed in 1956 has been playing a important role inregulating the companies. But at that times most of the British enterprises in Indialooked to the London capital market for funds than to the Indian capital market.
From Independence ,particularly after1951, the Indian capital market has been shown a steady improvement. Different typesof encouragement and tax relief were exist in the country to promote savings.In 1951 there exist around 28,500companies, they may include both public limited as well as private limited withhaving a paid up capital f Rs.775 crore. In the 1950s, Century Textiles, TataSteel, Bombay Dyeing, National Rayon, and Kohinoor Mills were to be identifiedas favourite scrip of speculators. As speculationbecame wide spread , the stock market came to know as the satta bazaar. Theplanning process started in India in 1951, with also provides importance tofinancial institutions and markets.
The trends which is shown in the capitalmarket were aggravated on forward trading its call badla, technically calledcontracts for clearing. Financial institutions such as LIC and