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3.3.1 INDIAN CAPITAL MARKET BEFORE 1990

  The starting of trading in securities was
started in  18th century, when buying and
selling of securities of the East India Company were going on both in Bombay
and Calcutta. The Bombay share brokers also  came together in July 1875 when the Bombay stock
exchange was formulated. This was continued  by Ahmadabad and Calcutta stock exchanges was
began  in 1894 and 1908 respectively.
The Indian capital market was not that much developed before the Independence. Thus
after independence, the Government of India appointed a  new committee with an objective to study the
securities market and which was headed by A.D.Gorwala.. According to the report
of the committee, submitted in 1951, was led towards the central
laws for the first time, as per that securities contracts (regulation ) Act
1956 and securities contracts ( regulation ) Rule 1957 were began. Thus
these laws were gave powers to recognise stock exchanges, to approve their
bye-laws and to issue directions to the stock exchanges on their functioning  and it also act as a regulative body . The
Companies Act passed in 1956 has been playing a important role in
regulating the companies. But at that times  most of the British enterprises in India
looked to the London capital market for funds than to the Indian capital market.
From  Independence ,particularly after
1951, the Indian capital market has been shown a steady improvement. Different types
of encouragement and tax relief were exist in the country to promote savings.
In 1951 there exist around  28,500
companies, they may include both public limited as well as private limited with
having a paid up capital f Rs.775 crore. In the 1950s, Century Textiles, Tata
Steel, Bombay Dyeing, National Rayon, and Kohinoor Mills were to be identified
as  favourite scrip of speculators. As speculation
became wide spread , the stock market came to know as the satta bazaar. The
planning process started in India in 1951, with also provides importance to
financial institutions and markets. The trends which is shown in the capital
market were aggravated on forward trading its call badla, technically called
contracts for clearing. Financial institutions such as LIC and 

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