Government Securities Government securities (G-secs) are supreme securities which are issued by the Reserve Bank of India

on behalf of Government of India in lieu of the Central Government's market borrowing program. The term Government Securities includes: Central Government Securities. State Government Securities Treasury bills The Central Government borrows funds to finance its 'fiscal deficit'. The market borrowing of the Central Government is increased through the issue of dated securities and 364 days treasury bills either by auction or by floatation of loans. In addition to the above, treasury bills of 91 days are issued for managing the temporary cash mismatches of the Government. These do not form part of the borrowing program of the Central Government. Features Features of Government Securities Issued at face value No default risk as the securities carry sovereign guarantee. Ample liquidity as the investor can sell the security in the secondary market Interest payment on a half yearly basis on face value No tax deducted at source Can be held in D-mat form. Rate of interest and tenor of the security is fixed at the time of issuance and is not subject to change (unless intrinsic to the security like FRBs). Redeemed at face value on maturity Maturity ranges from of 2-30 years. Securities qualify as SLR investments (unless otherwise stated). Benefits of Investing in Government Securities No tax deducted at source Additional Income Tax benefit u/s 80L of the Income Tax Act for Individuals Qualifies for SLR purpose Zero default risk being sovereign paper Highly liquid.

Transparency in transactions and simplified settlement procedures through CSGL/NSDL.