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Consider the following statements regarding Government Security (G-Sec) and Treasury Bills (T-bills).
1. In India, the Central Government issues both, treasury bills and bonds or dated securities while the State Governments issue only bonds or dated securities, which are called the State Development Loans (SDLs).
2. They are not available for small and retail investors.
Which of the above statements is/are incorrect?
  • a)
    1 only
  • b)
    2 only
  • c)
    Both 1 and 2
  • d)
    Neither 1 nor 2
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
Consider the following statements regarding Government Security (G-Se...
What is Government Security (G-Sec)?
A Government Security (G-Sec) is a tradeable instrument issued by the Central Government or the State Governments. It acknowledges the Government's debt obligation. Such securities are short term (usually called treasury bills, with original maturities of less than one year) or long term (usually called Government bonds or dated securities with an original maturity of one year or more). In India, the Central Government issues both, treasury bills and bonds or dated securities while the State Governments issue only bonds or dated securities.
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Most Upvoted Answer
Consider the following statements regarding Government Security (G-Se...
Understanding Government Securities (G-Sec) and Treasury Bills (T-bills)
Government Securities (G-Sec) and Treasury Bills (T-bills) are vital instruments in the financial market, especially in India. Let's analyze the statements provided.
Statement 1: Central and State Government Issues
- The statement is correct.
- In India, the Central Government issues both T-bills and dated securities (bonds), while State Governments do not issue T-bills.
- State Governments issue bonds known as State Development Loans (SDLs) to meet their financial needs.
Statement 2: Availability to Small and Retail Investors
- This statement is incorrect.
- T-bills and G-Secs are indeed accessible to small and retail investors.
- They can invest through various platforms including banks, mutual funds, and the Stock Holding Corporation of India (SHCIL).
Conclusion
- Given that Statement 1 is correct and Statement 2 is incorrect, the correct answer to the question is option 'B': 2 only is incorrect.
- Therefore, small and retail investors do have avenues to invest in these securities, contradicting the second statement.
Key Takeaway
- Government Securities and T-bills are crucial for both institutional and retail investors, promoting a broad participation in the Indian financial system.
Understanding these nuances is essential for anyone preparing for competitive examinations like UPSC.
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Consider the following statements regarding Government Security (G-Sec) and Treasury Bills (T-bills).1. In India, the Central Government issues both, treasury bills and bonds or dated securities while the State Governments issue only bonds or dated securities, which are called the State Development Loans (SDLs).2. They are not available for small and retail investors.Which of the above statements is/are incorrect?a) 1 onlyb) 2 onlyc) Both 1 and 2d) Neither 1 nor 2Correct answer is option 'B'. Can you explain this answer?
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Consider the following statements regarding Government Security (G-Sec) and Treasury Bills (T-bills).1. In India, the Central Government issues both, treasury bills and bonds or dated securities while the State Governments issue only bonds or dated securities, which are called the State Development Loans (SDLs).2. They are not available for small and retail investors.Which of the above statements is/are incorrect?a) 1 onlyb) 2 onlyc) Both 1 and 2d) Neither 1 nor 2Correct answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding Government Security (G-Sec) and Treasury Bills (T-bills).1. In India, the Central Government issues both, treasury bills and bonds or dated securities while the State Governments issue only bonds or dated securities, which are called the State Development Loans (SDLs).2. They are not available for small and retail investors.Which of the above statements is/are incorrect?a) 1 onlyb) 2 onlyc) Both 1 and 2d) Neither 1 nor 2Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding Government Security (G-Sec) and Treasury Bills (T-bills).1. In India, the Central Government issues both, treasury bills and bonds or dated securities while the State Governments issue only bonds or dated securities, which are called the State Development Loans (SDLs).2. They are not available for small and retail investors.Which of the above statements is/are incorrect?a) 1 onlyb) 2 onlyc) Both 1 and 2d) Neither 1 nor 2Correct answer is option 'B'. Can you explain this answer?.
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