What are Government Securities?
In order to meet its fiscal expenditure, the government has to borrow money. The RBI issues T-bills and Bonds on behalf of the Govt to raise money by offering a fixed return on investment. Very similar to how banks give interest on fixed deposits and use that money to lend to others, the government use it to run our country.
G-Secs is a collective term for these two type of securities:
maturities less than 1 year are called T-bills and those more than one year are called bonds.
Make sure to read
this
chapter on Varsity which explains about G-secs in detail.
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