Volume 3 (2007)

R. Kumar, Jamia Millia Islamia, New Delhi, India
K C Sharma, Govt. Post graduate College, Dholpur, India
Abstract

In pre-liberalisation regime, Indian economy was debt-ridden, both internally and externally. Public sector undertakings were running into losses, there was not enough foreign exchange to finance the imports, domestic investments were inadequate to fund the growing needs of the economy and the growth rate of the economy was very low. All this led the country to grave foreign exchange crisis. Capital needs of the large business were not being met by the financial sector due to large number of banks and financial institutions running into losses. Due to closed economy, capital needs of the private sector were not being met, as they were unable to tap foreign capital. High indebtedness of the corporates had become a burden on their profits due to exorbitantly high rates of interest on debt capital. When economic reforms were initiated, it was desired that globalisation and liberalisation would absolve the corporate sector from high indebtedness, integrate with the world economy, improve the financial performance as well as bolster the cost effectiveness of capital structure. The present paper examines the achievement of the above goals after 15 years of Economic Reforms.

Keywords: Capital structure, Trends, Private corporate sector, Economic reforms and  Perceiving- Judging.

Suggested citation: Kumar, R., & Sharma, K.C. (2007). Trends in capital structure practices of private corporate sector in India in post -liberalisation era. Skyline Business Journal, Voume 4, No.1, pp 2-9

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Suggested citation

Kumar, R., & Sharma, K.C. (2007). Trends in capital structure practices of private corporate sector in India in post -liberalisation era. Skyline Business Journal, Voume 4, No.1, pp 2-9