Capital Market has a crucial significance to capital formation. For a speedy economic development adequate capital formation is necessary. The significance of Capital Market in economic development is explained below: 1. Mobilisation of Savings and Acceleration of Capital Formation :- In Capital Market, various types of securities helps to mobilise savings from various sectors of population. The twin features of reasonable return and liquidity in stock exchange are definite incentives to the people to invest in securities. This accelerates the capital formation in the country.