Justify the following statement : Stock exchange works for the growth of the Indian Economy.

Answer: The statement is correct, because the stock exchange mobilises savings and channels them into productive investment.

• Mobilisation of savings: it encourages people to invest their savings in shares and debentures instead of keeping them idle.
• Capital formation: these savings flow to industry, helping capital formation and industrial growth.
• Liquidity: investors can sell securities at any time, which encourages investment.
• Economic barometer: movement of share prices and indices (Sensex, Nifty) reflects the state of the economy.
• Helps the government: government and public bodies can raise funds through bonds for development projects.
• Disinvestment and foreign investment: it supports disinvestment of public sector units and attracts foreign investors.
• Safety: trading under SEBI regulation protects investors and builds confidence.