Do we need stock exchanges?

 Bombay stock exchange is one of the oldest stock exchanges in Asia.  Currently, BSE, NSE and some more exchanges which are competing each other for success, clients and liquidity. The way the Indian market has opened up investment opportunities for the world , we can't deny the role of these stock exchanges.But, one article that has made me think about the contribution of these stock exchanges is in relation to growth and the upliftment of the poor in India. 

Mark Twain has divided the world into two kinds of people: Those who have seen the Taj Mahal , and those who haven't.  The same division is applicable for both India and the rest of the world. We can divide people into those who invest in stock market and those who don't. Majority of people don't  invest in stocks and few reasons could be:

1. 30%  of the population are still below poverty line. Investment is a distance dream for one third of the citizens in the country
2. Many who are capable to save their earning, view stock market are for gamblers, a traditional perception that is persistent across India . They dash their cash in Gold, bank deposit or various govt and non govt saving schemes.  They get better pay off with low risk. (Gold is not risk free!)
3. Some show great interest to invest in stock market, but they don't know the process to trade in the market. Undoubtedly,the retail participation in the Indian stock markets is very low compared to other developed markets.

Possibly, only 5-10% of the citizen are investing in stock markets.!!!! But there are 3-4 24X7 TV channels which have rooms filled with market experts and investors and their hosts who can both excite and lament in every 5-10 points swing in Sensex. Knowingly or unknowingly, our economists try to mimick developed countries policies. Major investors now have FII status, they put cash, take profit and leave this market when they sense uncertainty , creating panic among other local investors and depriving cash in hand of those who connect to stock markets with different market linked investment vehicles: Mutual funds, ETFs, ULIPs etc. When Indian companies can list in the global stock exchanges and can infuse money to their markets, they can definitely  create same direct or indirect benefits in their base country. Why should we make market for the 1 % of citizens who own more than 50% of 2000+ listed companies in BSE and NSE and create investment opportunity for hardly 10 % of Indians.