The growing turnover shows that more individuals and institutional investors are taking to trading on the bourses. The Securities and Exchange Board of India (Sebi) has taken up a series of measures to contain speculative element and bring back small and medium investors to the bourses to increase liquidity.

It has also encouraged the introduction of new financial instruments such as derivatives (index futures) to boost liquidity through risk hedging as well as impart depth to the market.

The NSE was the first stock exchange in the world to use satellite communication for trading. The turnover on the NSE in 1994-95, the year of its operations, was around Rs 17.3 billion, that accounted for about 1.1 of total turnover on the bourses of the country. By 1996-97 the NSE turnover reached Rs 2,945 billion accounting for 45.6 per cent of the total turnover.In 1999-00, the NSE turnover was around Rs 8,391 billion accounting for 41 per cent of total turnover. The share of other 20 stock exchanges in the country is minuscule. The impact of IT and growing trend towards mergers may leave the country with only four stock exchanges in the near future.

Will there be national stock exchanges in the future? The cross-border movement of capital that makes the national supervisory and regulatory bodies redundant, raises a question mark over the future of stock exchanges all over the world. The world, in this sense, is becoming a `global village' as envisaged by the late Marshall McLuhan. So it should have only one stock exchange. Naturally investors would like to go it global thanks to the spread of IT. That may mean a single global stock exchange with a regulatory body such as the `world stock exchange organisation' somewhat analogous to the World Trade Organisation (WTO).

Former NSE managing director RH Patil, in a recent article in the Economic & Political Weekly issue of November 18, 2000, has raised doubt over the very existence of national stock exchanges in the future. He says, "stock exchanges, as we understand them today, may not be there in about two decades. The first major transformation is growing cross-country listings. The other major development relates to mergers and strategic partnership among stock exchanges of different countries. The sum total of these developments will be the emergence of large global exchanges beyond the regulatory purview of any national regulator."

Nasdaq, the tech heavy bourse, is exploring the possibility of merger with the London Stock Exchange (LSE) and Deutsche Bourse to create a global market spanning all the key time zones. Recently there was an attempt at a hostile takeover of the LSE on the part of the OM group of Sweden.He has analysed the forces behind the trend towards a unified global stock exchange that will eliminate the need for national supervision. The emergence of the Internet and its wide reach into the households would have a far reaching impact on the capital market in the future.

Already IT application to the stock exchange operations has minimised the delay in both trading and settlement. The New York Stock Exchange (NYSE) has made it mandatory for the brokers to pass on the information in less than 90 seconds after the trade is executed. The Indian bourses may take time to operate with such real time efficiency. But the NSE has introduced technology in its operations that has enabled it to enhance the risk management capabilities.

However, the broker dominated stock exchanges have been slow in absorbing IT. But they may have to change fast under pressure of global competition. Mr Patil says, "exchanges would soon realise that their main operations are essentially related to transaction clearing. Their efficiency in transaction clearing is going to be the major factor which would influence their fortune." Demutualisation of stock exchanges or the move towards a corporate entity where the shares are not owned necessarily by the stock share brokers will be crucial in the future. The demutualised exchanges are supposed to minimise management conflict and reduce the control of brokers. The future global market will change if NYSE and Nasdaq succeed in their efforts to develop a global equity market by the major stock exchanges operating in different time zones that form an alliance for trading purposes. Indian bourses, then, will have little option but to adjust to the global reality.