India is celebrating the 71st Independence Day today. On the occasion, Prime Minister\u00a0Narendra Modi\u00a0will hoist the tricolour for the fourth time from the ramparts of Red Fort in the national capital. On the eve of Independence Day, President Ram Nath Kovind addressed the nation for the first time. The President spoke about the dream for a new India, saying, \u201cIn the year 2022, our country will complete 75 years of Independence. It is our national resolve to attain certain desired milestones for a New India by then. When we speak of a New India, what do we mean? There are some obvious parameters \u2013 like a house for every family, power on demand, better roads and telecom, a modern railway network, rapid and sustained growth.\u201d India has come a long way since its independence from the British rule 70 years ago, and so have the country's stock markets. We take a look at seven defining moments which shaped how Indian stock markets work. Launch of Sensex - India's first ever stock index The benchmark index Sensex, first compiled in 1986, was calculated on a "Market Capitalisation-Weighted" methodology of 30 component stocks representing large, well-established and financially sound companies across key sectors. The base year of S&P BSE Sensex was taken as 1978-79. Since 1 September 2003, the 30-share barometer is being calculated on a free-float market capitalisation methodology. Major index providers like MSCI, FTSE, STOXX, and Dow Jones use the free-float methodology. Today, the Sensex is the benchmark index, considered by many as the barometer of India's corporate progress, and, in some respects, also a measure of the impact of the economic progress on India's corporate scenario.\u00a0The top ten companies by weight on the Sensex are ITC Ltd 9.57% Reliance Industries Ltd 9.05% ICICI Bank Ltd 7.95% HDFC Bank Ltd 7.78% HDFC Ltd 7.71% INFOSYS Ltd 6.86% Larsen & Toubro Ltd 5.39% TCS Ltd 4.48% SBI 3.88% Tata Motors Ltd 3.59%. Launch of NSE - expansion of trading horizons The National Stock Exchange was incorporated in 1992. It was recognised as a stock exchange by SEBI (Securities & Exchange Board of India) in April 1993 and commenced operations in 1994 with the launch of the wholesale debt market, shortly followed by the launch of the cash market segment. In the year 1996 the exchange commenced the trading and settlement in dematerialised securities. In the same year, NSE created and administered a settlement fund and launched Nifty 50 Index, a broader benchmark index as compared to Sensex.\u00a0In 2000, the exchange launched index futures based on the Nifty 50 index and listed index futures on Nifty 50 on the Singapore Exchange and introduced internet trading. Today, BSE trails the rival NSE by a huge margin in equity cash and equity derivatives segment. Older BSE has only 14% market share equity cash trading, while NSE, launched much later, commands over 80% of the market. Harshad Mehta scam - the game changer Harshad Mehta became one of the biggest stock market operator on the Dalal Street in the early 1990s. Mehta's highly ambitious journey through India\u2019s stock markets and his eventual fall into a web of a Rs-4999 crore scam on the Bombay Stock Exchange is well-captured in news coverage of the time. Mehta manipulated the stock market by buying heavily with borrowed money which was siphoned in through restricted route. Such was the magnitude of the scam that after it broke, BSE remain closed for a month. The\u00a0scandal exposed the loopholes in the Indian banking system, market regulator and the transaction system of Bombay Stock Exchange. Soon after, Indian capital market regulator SEBI introduced new rules to cover those loopholes. Reliance Industries IPO - bringing the equity cult to masses Now Mukesh Ambani-controlled Reliance Industries, the largest\u00a0listed company in India by market capitalisation, came up with an initial public offer (IPO) in the year 1977 (then, Reliance Textiles Industries Ltd) and changed the equity fashion in India with its issue getting oversubscribed by seven times. Since then, companies routinely follow the IPO route to raise funds from the market by selling shares to the general public. It is this equity culture that can be credited with the progress of the stock market in India. Introduction of derivatives trading - an all new asset class BSE created history on 9 June 2000 by launching the first exchange-traded index derivative contract in India futures on the benchmark index Sensex, which was followed by NSE\u2019s derivatives with the launch of index futures on 12 June 2000. In sequence of product innovation, BSE commenced trading in Index Options on Sensex on 1 June 2001; stock options were introduced on 31 stocks on 9 July 2001; and single stock futures were launched on 9 November 2002. On NSE futures on individual securities were introduced on November 9, 2001. The Exchange has also introduced trading in Futures and Options contracts based on Nifty IT, Nifty Bank, and Nifty Midcap 50, Nifty Infrastructure, Nifty PSE, Nifty CPSE indices. Now, derivatives (futures and options) allow big investors to trade in securities in large quantities with little money being put upfront. UTI - first mutual fund of India The mutual fund industry in India began in 1963 with the formation of the Unit Trust of India (UTI) as an initiative of the Government of India and the Reserve Bank of India. Later, in the year 1987, SBI Mutual Fund came into existence which was the first non-UTI mutual fund in India.\u00a0In 1993 private sector funds entered into the market which started a new era in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. Now, mutual funds offer a relatively safer avenue of investing in equities or other securities by relying on the expertise of the fund manager, and thus promoting a wider participation in the stock markets. Allowing Foreign Institutional Investors - strengthening the base It was in the year 1992 that the FIIs were first allowed to invest in the Indian equity markets. Fresh after the historic economic liberalisation, India seemed to be an attractive destination for the foreign investors with money to invest in a sudden high-growth market. Since then, India's stock markets, to a large extent, have been fueled by the foreign institutional investors, who are estimated to be holding well-above a quarter of Indian equities today.