Under the MSS, the RBI  BIS Review 125/2007  5  was allowed to issue government securities as part of liquidity sterilisation operations in the wake of large capital inflows and surplus liquidity conditions.
While these issuances do not provide budgetary support, interest costs are borne by the fisc; as far as Government securities market is concerned, these securities are also traded in the secondary market, on par with the other government stock. Second, another development in the recent period has been to fix a numeraire to inflation.