What does Gilt-edged market in India mean?

In the Indian financial system, the 'Gilt-edged market' refers to the market for government securities (G-Secs). These instruments are issued by the Central and State governments to borrow funds from the market [t1]. They are termed 'gilt-edged' because they carry practically no risk of default, making them the safest investment options available [c3]. Historically, the name originated from the practice of issuing bond certificates with gilded (gold-trimmed) edges to symbolize their high quality and dependability [t2][t3]. These securities include Treasury Bills (T-Bills) and dated securities, which are considered risk-free or 'sovereign' because they are backed by the government's guarantee [c1][t3]. While the term 'gilt' sounds like gold, it does not refer to the commodity market of gold or silver, but rather to the high-grade, safe nature of the debt instruments [t1][t2].

Sources

1. [1] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > Retail Direct Scheme (of RBI): > p. 47
2. [2] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2.5 Government Securities > p. 45
3. [3] https://www.investopedia.com/terms/g/gilt-edged-securities.asp