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Shadows of economic prosperity in india in retrospection of the capital market


  • Lahiri, Soumitra


Indian share market has never been like this. Market indexes have appreciated in an unprecedented manner since June 2006 and are creating new records of attaining altitudes that were beyond dreams a couple of years back. Media and Government never give up the opportunity of going gala over new laurels of economic prosperity being achieved by the nation. Even amidst such overall positivism question arises as to whether the achievements being flaunted about are truly real or not. The value of Indian currency (Rs) has been gaining on value against hard currencies like US Dollar etc since mid 2002 and the Indian capital market experienced true upheaval from 2003 onwards. Furthermore, Internet trading and thereafter derivative trading was introduced by Government of India during the year 2000 when since investments from foreign institutional investors started pouring in. Therefore, besides the economic prosperity or irrespective of economic prosperity, an investment boom could happen since exchange rate decline was rendering extra income/capital appreciation for foreign institutional investors. The article describes as to how investments from foreign investors have influenced mania in Indian share market and consequently driven the country on the verge of bankruptcy and/or virtual financial crash that may happen any ti

Suggested Citation

  • Lahiri, Soumitra, 2007. "Shadows of economic prosperity in india in retrospection of the capital market," MPRA Paper 1778, University Library of Munich, Germany, revised 13 Feb 2007.
  • Handle: RePEc:pra:mprapa:1778

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    More about this item


    Globalization; decontrolling of economy; investments; foreign institutional investors; market index; India; Indian capital market;

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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