By the term Capital market we mean a market for long term funds, whereas the money market constitutes the market for short term funds. Capital market includes all existing facilities and institutional arrangements developed for borrowing and lending medium and long term funds available in the market. This is not a market for capital goods, rather it is a market for raising and advancing money capital for investment purposes. According to V.A. Avadhani, “Capital market is a wide term used to comprise all operations in the New issues and stock market. New issues made by the companies constitute the primary market, while trading in the existing securities relates to the secondary market. While we can only buy in the primary market, we can buy and sell securities in the secondary market.” In a capital market, the demand for long term funds mostly arises from private sector manufacturing industries, agricultural sector and also from the Government, which are again largely utilized for the economic development of the country. Even the consumer goods industries usually need a considerable support from the capital market. Similarly, both the State and the Central Governments which are engaged in developing infra-structural facilities viz., transport, power, irrigation, communications etc. along with the development of basic industries also need a considerable support from the capital market. In a capital market, the supply of funds usually comes from individual savers, corporate savings various banks, insurance companies specialized financial agencies and also the Government. After independence, the rapid growth and expansion of the corporate and public enterprises has necessitated the development of the capital market in India.