The Impact of Stock Market on Growth of Industry in India during Post Reform Periods

Indian Stock market performs multitasks and help the cause of industrial development and economic growth. It helps to raise capital for enterprises, mobilizes savings for investment, facilitates the growth of the enterprises, create investment opportunities for small investors and facilitates rising of capital for various projects. The stock exchange facilitates the industrial growth by providing finance for the enterprises. A well developed and ably regulated stock market facilitates sustainable development of the country in general and industry in specific, by providing long run funds in exchange for financial assets to the inverters. It creates market for company‟s shares. It also helps in increasing the esteem and status of the company. The stock exchanges also promote the company by creating public interest in it with additional fund by means of issuing new shares or other securities. Industrialization or perish is the development mantra Sir M Visvesvaraya gave to India. But the path to industrialization is not an easy path, It requires lost of infrastructures including that of finance. The growth of the Corporate Industrial sector, apart from its own savings depends on the inflow of financial resources into it. The importance of financial sector to industrial growth as well as economic growth is debated by various economists. Some economists like Robinson (1952), Lucas (1988) do not consider financial system as important tool for economic growth. John Robinson stated „where enterprise leads, finance follows‟ but economists like Bagehot


Objectives
The important objectives of the study are; 1. To review the stock market and industrial production scenario in the country during the post reform period 2. To assess the influence of stock market on industrial growth Hypotheses 1. H 1 = Stock market growth is not correlated with industrial growth in India H 0 = stock market growth is correlated with industrial growth in India 2. H 1 =IP is not influencing Market Capitalization, Gross Market Turnover and Sensex H 0 =IP is influenced by Market Capitalization, Gross Market Turnover and Sensex

Methodology
This study is based on the secondary sources of data and review the historical as well as current information. The data is collected from SEBI"s, Annual reports of various years, SEBI"s Hand Book of statistics on Indian Securities Market, RBI"s Annual reports of various years, RBI"s, Hand Book of Statistics of Indian Economy of various years and Government of India"s Economic Survey of relevant years, Journals and Articles. In order to analyze the data, apart from regular tabular analysis, percentages, averages. Standard statistical tools like simple and multiple regression analysis, ANOVAs, is used to derive analytical inference with respect to the objectives of the study. The 31 years data from 1991-2022 has been considered for the analysis.

Development of Industrial sector after post economic reform period
The year 1991 ushered a new era of economic liberalization. The License Control Raj was removed as several barriers to entry were removed. The system of widespread industrial licensing which required Government permission for establishment, extension, expansion, utilization of surplus capacity, was abolished. Licensing limited to small list of industries, due to strategic environmental and pollution deliberation. The corresponding but separate controls over investment and expansion by large scale industrial houses through the Monopolies and Restrictive Trade Practices (MRTP) Act have also been abolished. FERA was replaced with FEMA Companies Act was thoroughly amended to that it is simplified modernized in tune with changing time and liberalization in the background. Liberalization of trade and exchange rate policies, rationalization and reduction of customs and excise duties and personal and corporate income tax etc. Industrial sector showed signs of higher growth from 1991-92, it is explained below table. After liberalization industrial sector showed signs of gradual growth from 1991-92, to 2018-19. Amount 325150 crore in 1991-92 and moderate increase year by year to 3749971 crore in 2021-22 in constant price provisional estimates by NSO, reason for slow growth are Sudden exposure to foreign competition, slowdown in investment sluggish growth in demand and exports The bottlenecks in infrastructure falling business confidence in face of global uncertainties and political factors, firm commodity prices amidst inflationary pressures, tightening of monetary conditions and weak supply response.

Distribution of Turnover at Cash Segment of BSE
It is the barometer of the size of the stock market and market value of investors" wealth. The turnover signifies market liquidity which is calculated by dividing the total number of shares traded over a period by the average number of shares outstanding for the period. The higher the share turnover, the more liquid is the share of the company. Volume 4, Issue 6, November-December 2022 4

Market Capitalization of BSE
The market capitalization, is the total value of the issued shares of a publicly traded company; it is equal to the share price times the number of shares outstanding. It could be used as a proxy for the public opinion of a company"s net worth and is a determining factor in some forms of stock valuation. It is the barometer of the size of the stock market and market value of investors" wealth.

Multivariate Regression Model
In order to test the impact of stock market on industries the following model has been formed. In this model industrial production is dependent and market capitalization, gross market turnover and Sensex are independent variable. This Model presumes that Industrial production depends upon Sensex, Market turnover, and Market capitalization.
The model is written as; IP= f (MC, GMT, SEN) Where, LIP= log Industrial Production LMC = log Market capitalization LGTO= log Gross Market Turnover LSEN= log Sensex In order to make the operation easier to handle the log of all the variables are taken, then LIP= α0 + α1 MC +α2 GMT + α3 SEN

Discussion of the Result
The calculated F value is 87.535 with a corresponding value of .000 which states that it is significant at 5% level. Hence the overall fitness of the model is justified.
The value of R square is .939 which is nearing to one indicating that regression model is a good fit. The data implied that 93.9% of variance of the Industrial Production has been explained by the repressor of Market Capitalization, Gross Turnover and Sensex. The adjusted R square is 0.928 which means that about 92% of the variation in the observed behavior in dependent variable GDP. In order to test the presence of auto correlation Durbin Watson statistics was done which came to 1.692 which indicated that the problem of autocorrelation is fairly solved. The model reveals that 1 percent increase in market capitalization will lead to increase in Industrial Production by 0.39 percent. The one percent increase in Gross Market Turnover will lead to an increase in Industrial Production by 0.20 percent. Where as one percent increase in Sensex will lead to an increase in Industrial Production by 0.17 percent The findings of the study reveal that stock market positively influences the Indian Industrial Production. Hence the hypothesis that stock market is not related with industrial growth in India is rejected and null hypothesis that states stock market growth is correlated is accepted. Market Capitalization and Gross Market Turnover has the higher influence than Sensex.

Conclusion
The stock market help the industrial growth as it gives finance for the enterprises, creates market for company"s shares. It also helps in increasing the esteem and status of the company. The stock exchange also helps to creates public interest in the company and thereby its products. It also helps the company with additional fund by means of issuing new shares or other securities. The findings of the study reveal that stock market positively influences the Industrial production Market Capitalization and gross turnover has the higher the influence. The global financial crisis impacted majority of the economies, but very few escaped from the wrath of crisis, of them India is one of the major country, as it has higher immunity to resists global melt down. The government of India, RBI, and SEBI guarded the capital market and Indian economy. BSE contribute almost the entire stock market turnover, market capitalization in India. Both the market is doing well and the volatility of market is the least in the world.