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INTRODUCTION TO INDIAN FINANCIAL SCENARIO
India has witnessed in the past two decades substantial changes in the money and capital markets. The money market scenario, which has emerged since 1980s, has witnessed new instruments and new directions have been chalked out. It is to be noted here that, strictly speaking, the money market deals with short-term flow of funds whereas the capital market, embracing the stock market, deals with medium and long-term capital flows. But these two markets cannot be placed in watertight compartments and there is often a spillover from one market to the other. This explains why the papers included in this volume not only deal with money market problems but also with issues arising out of the growth and working of the Indian capital market. However, it is pertinent to note that the main thrust of the papers, presented in this volume, is on the issues connected with the emerging role of the Indian money market in a market-economy setting
Financial System of any country consists of financial markets, financial intermediation and financial instruments or financial products. This paper discusses the meaning of finance and Indian Financial System and focus on the financial markets, financial intermediaries and financial instruments.
The term "finance" in our simple understanding it is perceived as equivalent to 'Money'. We read about Money and banking in Economics, about Monetary Theory and Practice and about "Public Finance". But finance exactly is not money, it is the source of providing funds for a particular activity. Thus public finance does not mean the money with the Government, but it refers to sources of raising revenue for the activities and functions of ...