The government on Friday said that the sharp rise in capital market in the last three months was not just due to inflows from foreign institutional investors but the overall improvement in the economy, anticipated better GDP growth and good corporate earnings.

"The finance ministry is currently monitoring inflows from FIIs...various mechanisms borne out of past experience (of 1990 stock scam) are in place to prevent such situations," Finance Minister Jaswant Singh said during the Question Hour in Lok Sabha.

He was replying to the concern expressed by Kirit Somaiya (BJP) and Nitish Sengupta (Trinamool Congress) on whether the recent liquidity in the stock market was "unhealthy" and whether the interest of small investors was being protected to restore their confidence.

According to the Securities and Exchange Board of India, the recent rise in the stock market indices was attributable primarily to factors like overall improvement in global economy, anticipated better GDP growth, good corporate earnings, low interest rates and increased FII inflows, he said.

The total market capitalisation as on November 28 stood at Rs 10,65,853 crore (Rs 10,658.53 billion) on the Bombay Stock Exchange and Rs 9,79,540 crore (Rs 9,795.40 billion) on the National Stock Exchange.

Out of this, Rs 87,721.2 crore (Rs 877.21 billion) was on account of net investment by FIIs, he said, adding the net FII investment during June-November this year was Rs 22,340 crore (Rs 223.40 billion).

Sebi and the stock markets were taking several steps to ensure safety, integrity and efficiency of the market, he said.