However, the decline witnessed in 2012-13 was lower compared to the previous two financial years, wherein the country's stock exchanges cash turnover together had fallen 25.6 per cent in 2011-12 and 15 per cent in 2010-11, as per Securities and Exchange Board of India's (Sebi) latest annual report.
Cash turnover is the total value of shares traded during a period.
The market regulator said that even though a rise in the equity prices was observed in 2012-13, there was a fall in the trading volumes at the country's stock exchanges.
According to Sebi, Indian securities market "started the year 2012-13 on a low note following the global economic signals of 2011-12".
However, "the reform measures undertaken by the government as well as slender improvements visible in the global economic condition have uplifted the mood in the domestic securities market," it added.
In terms of individual exchanges, the annual turnover at Bombay Stock Exchange declined by 17.8 per cent to Rs 5.48 lakh crore in 2012-13 from Rs 6.67 lakh crore in the previous fiscal.
Besides, the turnover on National Stock Exchange (NSE) dropped 3.7 per cent to Rs 27 lakh crore from Rs 28.1 lakh crore.
The NSE and the BSE accounted for 99.8 per cent of the cash turnover of all recognised bourses last fiscal, according to data compiled by the market regulator.
While, the NSE represented the largest share (about 83 per cent) in total turnover, the BSE accounted for 16.8 per cent.
The other bourses, which recorded turnover in the last financial year were Calcutta Stock Exchange and MCX-SX.
Among the top 20 cities in terms of highest turnover in the cash segment, financial hub Mumbai took the top slot on both the NSE and the BSE.
The report showed that in last fiscal, "Mumbai/Thane" made up for 61.7 per cent with Rs 16.71 lakh crore turnover on the NSE, while on the BSE, Mumbai accounted for 51.7 per cent at Rs 2.83 lakh crore.
"Delhi/Ghaziabad" came in second on the NSE, whereas on the BSE, the second spot was taken by Ahmedabad.
Kolkata region stood at third place on both the bourses.
"Widening the geographical reach of capital market is one of the important aspect of development of securities markets in India," Sebi said in its report.
In this regard, the regulator observed that online trading facilities, dematerialised securities and electronic IPO application system have helped "catalyse the penetration of equity investment culture into the farthest corners of a diverse nation like India".