Definition
Government Securities (G-Sec)
Government securities are tradable debt instruments issued by the central or state governments, considered virtually free of credit risk in rupee terms.
G-secs include short-term Treasury Bills and longer-term dated securities, plus state development loans issued by states. Because they carry a sovereign promise to repay in rupees, their yields form the benchmark against which all other rupee borrowing is priced.
Individuals can now buy G-secs directly through the RBI Retail Direct platform, while institutions dominate the wholesale market. The inclusion of Indian G-secs in global bond indices has opened the door to larger foreign inflows, deepening the market and influencing the government's cost of market borrowing.
Related terms
- Market Borrowing (Dated Securities)Market borrowing is the money the government raises by issuing dated securities — long-term bonds — to investors to finance its fiscal deficit.
- Treasury BillsTreasury Bills are short-term government securities issued at a discount and redeemed at face value, used to manage the government's temporary cash needs.
- RBI Retail DirectRBI Retail Direct is a scheme that lets individual investors directly open an account with the RBI to buy and hold government securities without an intermediary.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.