Core Insights - The Reserve Bank of India (RBI) is expected to infuse at least ₹5 lakh crore through liquidity operations in the next fiscal year to address supply-demand imbalances in the bond market [7][2] - Total issuances from the Centre, states, and companies are estimated to be a minimum of ₹40 lakh crore, making liquidity measures crucial for containing borrowing costs [7][1] - The RBI has already bought back nearly half of the central government's borrowings in FY26 through open market operations (OMO), setting a record for OMO purchases [7][1] Government Borrowing Plans - The central government plans to borrow ₹14.77 lakh crore via dated securities in the current fiscal year, with the RBI having already bought back ₹6.88 lakh crore of sovereign bonds from the market [2][7] - Economists predict that the RBI will need to act as a balancing factor in the bond market due to potential bearishness stemming from states' fiscal challenges [2][7] Banking System Liquidity - The banking system liquidity is currently at a daily average surplus of ₹2.66 lakh crore, which is approximately 2.6% of net demand and time liabilities (NDTL) as of February [5][7] - Economists emphasize the need for the RBI to ensure that core liquidity surplus does not fall below 1% of NDTL by March 2027 [6][7]