Looking at the facts
http://www.moneycontrol.com/mutual-funds/performance-tracker/returns/debt-short-term.html
average return from 1 year short term debt is of about 5%. just 5%.
another thing to remember is that debt fund are also subjective to extensive research before investing into them, crisil AAA, crisilA1+ are of no use. credit agencies were not able to evaluate MBS in 2007-8 how can we trust them, they are not responsible for our investments anyways.. (crisil is not govt owned).
second thing i would like to point out that indian debt market is not yet developed, we don't eve have a 10 year corporate bond yield index like they have in us (moddy, merill etc). its good for corporates to invest into debt to hedge against inflation. for average joe like us he should stick to the common stocks which offer both great security and return (depends on analysis).