UPSC Prelims 2002 Q77: Indian Economy – Financial Markets & Capital Markets
Among the following major stock exchanges of India, which one recorded the highest
turnover during the year 2001 - 02?
- (a) Bombay Stock Exchange
- (b) Calcutta Stock Exchange
- (c) Delhi Stock Exchange
- (d) National Stock Exchange
Answer: (d) National Stock Exchange
Explanation
Stock exchange with the highest turnover in 2001-02
| Exchange | Position in turnover |
|---|---|
| National Stock Exchange (NSE) | Highest turnover in 2001-02, ahead of the BSE since 1996-97 in most years |
| Bombay Stock Exchange (BSE) | Largest by number of listed companies, but lower turnover |
| Calcutta Stock Exchange | Much smaller turnover |
| Delhi Stock Exchange | Much smaller turnover |
The NSE, with its screen-based trading and derivatives, recorded the highest turnover among Indian exchanges in 2001-02. The BSE is the oldest and has more listed companies, but its turnover was lower.
Answer: (d) National Stock Exchange.
Why each option is right or wrong
- (a) Incorrect. The BSE has more listings, but its turnover was lower than that of the NSE.
- (b) Incorrect. The Calcutta exchange had a much smaller turnover.
- (c) Incorrect. The Delhi exchange had a much smaller turnover.
- (d) CORRECT. The NSE had the highest turnover in 2001-02.
Key point
NSE: set up 1992, started trading 1994; Nifty is its index; leads turnover in equity and derivatives.
Remember
NSE leads turnover; BSE leads listings.
Common mistakes
- Choosing the BSE, the oldest and best-known exchange.
- Confusing the number of listings with the turnover.
- Ignoring the rise of electronic trading.
Exam tip
'Highest turnover' points to NSE; 'oldest' points to BSE.
Sources
- SEBI Annual Report 2001-02
- Economic Survey 2001-02