UPSC Current Affairs
G-secs
About: Government Securities (G-Secs) are tradable debt instruments issued by the Central or State governments in order to borrow money from the public to finance their fiscal deficit. These securities represent a contractual obligation to pay the holder a fixed amount of money, called principal or face value, on a specified date. They can be short-term, with original maturities of less than one year, or long-term with original maturities of one year or more.
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About: Government Securities (G-Secs) are tradable debt instruments issued by the Central or State governments in order to borrow money from the public to finance their fiscal deficit. These securities represent a contractual obligation to pay the holder a fixed amount of money, called principal or face value, on a specified date. They can be short-term, with original maturities of less than one year, or long-term with original maturities of one year or more.
About:
- Government Securities (G-Secs) are tradable debt instruments issued by the Central or State governments in order to borrow money from the public to finance their fiscal deficit.
- These securities represent a contractual obligation to pay the holder a fixed amount of money, called principal or face value, on a specified date.
- They can be short-term, with original maturities of less than one year, or long-term with original maturities of one year or more.
- In India, the Central Government issues both treasury bills and bonds while State Governments issue only bonds, known as State Development Loans.
- G-Secs are considered to be risk-free gilt-edged instruments and are high-grade investment bonds offered by governments and large corporations as a means of borrowing funds.
Types of Government Securities (G-Secs):
- There are four types of Government Securities (G-Secs): Treasury Bills (T-bills), Cash Management Bills (CMBs), Dated G-Secs, and State Development Loans (SDLs).
T-bills:
- Treasury bills are money market instruments issued by the Government of India as a promissory note with guaranteed repayment at a later date.
- They are primarily short-term borrowing tools, having a maximum tenure of 364 days, available at zero coupons (interest) rate.
- They are issued at a discount to the published nominal value of government security (G-sec).
- Government treasury billscan be procured by individuals at a discount to the face value of the security and are redeemed at their nominal value.
Syllabus: Prelims; Economy
- Prelims: Key facts, institutions, locations and terminology in the article.
- Mains: Connect the topic with Economy, Polity & Governance.
- Revision: Use the article headings to prepare concise notes and answer-writing points.
Test your understanding
Questions from this article
Prelims practiceWith reference to G-secs, consider the following statements:
- Government Securities (G-Secs) are tradable debt instruments issued by the Central or State governments in order to borrow money from the public to finance their fiscal deficit.
- These securities represent a contractual obligation to pay the holder a fixed amount of money, called principal or face value, on a specified date.
- They can be short-term, with original maturities of less than one year, or long-term with original maturities of one year or more.
Which of the statements given above are correct?
- 1 and 2 only
- 2 and 3 only
- 1 and 3 only
- 1, 2 and 3
View answer
Answer: (d) 1, 2 and 3. All three statements are drawn from the article.
Mains practiceDiscuss the background, key issues and significance of G-secs for India.
Answer in 250 words.
View answer approach
- About:
- Types of Government Securities (G-Secs):
- T-bills:
Frequently asked questionsFrequently asked questions
Why is G-Secs in the news?
About: Government Securities (G-Secs) are tradable debt instruments issued by the Central or State governments in order to borrow money from the public to finance their fiscal deficit. These securities represent a contractual obligation to pay the holder a fixed amount of money, called principal or face value, on a specified date.
What are the key facts about G-Secs?
They can be short-term, with original maturities of less than one year, or long-term with original maturities of one year or more. In India, the Central Government issues both treasury bills and bonds while State Governments issue only bonds, known as State Development Loans. G-Secs are considered to be risk-free gilt-edged instruments and are high-grade investment bonds offered by governments and large corporations as a means of borrowing funds.
Why is G-Secs important for UPSC preparation?
The topic connects current developments with Economy, Polity & Governance and is relevant for both objective revision and analytical answer writing.