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.