Explain the following: Primary market is of great significance to the economy of a country.

The market wherein resources are mobilised by companies through issue of new securities is called the primary market. The issuer of securities sells the securities in the primary market to raise funds for investment and/or to discharge some obligation. The Primary Market (New Issues) is of great significance to the economy of a country. It is through the primary market that funds flow for productive purposes from investors to entrepreneurs. The latter use the funds for creating new products and rendering services to customers in India and abroad. The primary market creates and offers the merchandise for the secondary market.