Decades Following Independence

1960s 

This decade was overcast by severe droughts during 1965 to 1967 and spectator of two wars and needless to say that the wars and drought did affect the Indian Stock Markets negatively. Also the bans and restricted trading dwarfed the growth of Private Sector thus impacting the markets in an adverse manner.

1970s

This decade was more turbulent than the last two, as there was a war and emergency and nuclear test and the reactions that followed. And as if it was not enough, and to make the matters worse the Government of India asked the foreign companies to liquidate their equities and thus Indianised most of the industries. Then they introduced the Foreign Exchange Regulation Act (FERA) in the year 1973 as a last nail in the coffin of foreign equity. It took almost 15 years for foreign equity to re-enter our markets.

1980s

It was in the middle of 1980s that the Indian Stock Market experienced a positive turnaround which encouraged retail investment too. Companies that were most benefited were Reliance Industries and Bombay Dyeing. The Reliance Group came up with a lucrative IPO which was a huge hit and thus generated further interest in Indian Capital Markets. Also the convertible debentures offered by Tata Engineering, Reliance Textiles etc propagated the popularity of markets. 

It was then, that the government under late Prime-Minister Rajiv Gandhi, partially liberalized the Indian Economy giving the required boost.

But at the same time, our economy was crippled from ever increasing foreign debt along with poor performances of Public Sector. To make the matters worse Balance of Payment situation was totally unconstrained.

Indian Equity Market Post Independence

While Indian subcontinent was cheering its independence in the year 1947, stock market suffered depression owing to partition. Lahore stock exchange was shut down and then merged with the Delhi Stock Exchange. The impact of world economy which was struggling post World War II, was also visible on Indian Stock Market too.

The coming decades paved the way to a more structured markets and reforms that created the present day Stock Exchanges operating in India. 

1950s 

In the year 1947, the Capital Issues (Control) Act was enacted, which controlled securities that were introduced during World War II. The Act was governed by the office of Controller of Capital Issues (CCI) which came under Ministry of Finance.
Securities Contract (Regulation) Act was introduced in 1956 and all eight recognized stock exchanges came into its purview. Those 8 stock exchanges were - Bombay, Delhi, Calcutta, Madras, Ahmedabad, Hyderabad, Manglore and Indore. All the members, contracts in securities came under this Act. Also restrictions on issuing securities was enforced.

Both of these Acts were abolished in the year 1992 as a part of the liberalization and economic reforms in India. Securities and Exchange Board of India (SEBI) emerged as the absolute regulator of Stock Exchanges and members and all the activities carried on by and in the exchanges.

There were as many as 500 brokers at the time of independence registered with Bombay Stock Exchange. The number remain more-or-less same as the government policies which were Socialist and the strict regulations on the capital markets did not render positive for the stock market. Therefore the decade after the independence did not witness any major changes in the market and brokering was considered no serious occupation but gambling. Stock Market too was majorly dependent on speculations and hunches or brokers and were also manipulated a lot. Companies like Bombay Dyeing, Birla, Scindia, TELCO etc were investors/brokers favorites in those times.

Read more about the following decades !