Under G-SAP, the RBI will conduct secondary market bond purchases of Rs 1 lakh crore in Q1.

While the G-SAP will run alongside other measures, Patra said the purchases under this plan will be factored into the central banks overall liquidity situation. This suggests that bond purchases under this programme may substitute bond purchases under open market operations.
The RBI is now acting as a direct filter of the demand-supply mismatch in the government securities market amid elevated borrowings, said Madhavi Arora, economist at Emkay Global. It (G-SAP) attempts to break the negative loop of liquidity miscommunication and sovereign premia, she said.
The G-SAP programme is being seen, for all intents and purposes, as being equivalent to a calendar for open market operations. This could lead to much lower sovereign risk premia ahead amid an elevated borrowing calendar this year. We reckon the RBI will continue to strive fixing artificially the skewed yield curve, Arora said.
Bond yields have risen sharply since the Union Budget was announced in February. The government intends to borrow Rs 12 lakh crore from the markets this year.
The G-SAP will almost serve the purpose of an OMO calendar, which had been on the bond markets wish list for a long time. While we dont think that the central bank is targeting any level for bond yields, they clearly recognize the need for anchoring interest rates during the current nascent stage of growth recovery and remain forthcoming in conveying that to the markets, said Siddhartha Sanyal, chief economist at Bandhan Bank.