Government vs. Corporate Bonds

A Government Security (G-Sec) is a bond issued by the Government of India (or state governments), backed by the sovereign's ability to tax and print currency - considered the lowest-risk rupee-denominated investment available, and priced accordingly with a lower yield. A corporate bond is issued by a company to raise funds, and carries real default risk if that company runs into financial trouble - which is why every corporate bond carries a credit rating (from agencies like CRISIL or ICRA) signaling how likely the issuer is to repay, with lower-rated bonds paying a meaningfully higher coupon to compensate investors for that added risk. As a rule of thumb: the higher the yield a bond offers relative to a comparable G-Sec, the more credit risk you're taking on to get it.