Capital market consists of lenders and borrowers. The supply of funds comes from the lenders and the demand for funds comes from the investors. The supply of long-term funds comes form the investing public from their savings. These savings may accrue from the following sources:
• Household savings
• Foreign capital
• Corporate savings
• Institutional investors
• The government.
The demand for capital comes from the industrial sector and predominantly from the manufacturing group. In India, there are tow distinct sector of the industry, the public sector and the private sector. The demand of the private sector is fully met by the capital market, while that of the public sector by the state exchequer. The government also depends, to a certain extent, on the capital market to fulfill its demand for capital.
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