MUMBAI, Feb. 23 -- Four months ago when central bank governor Shaktikanta Das sought "cooperative solutions" from the bond market, the intent should have been clear. The Reserve Bank of India (RBI) wanted bond investors to increase their appetite to accommodate the government's mammoth borrowing programme. It also wanted them to do so at a cheaper cost.

In short, Das wants to have the cake and eat it too. It wants the government bond supply to go through and also wants prices to not fall or yields to not rise. It should not surprise us that the plan is not working out well. The benchmark 10-year bond yield is way above 6% currently, a level at which the RBI was trying to keep bonds at a few weeks ago. Analysts at Crisil Ltd expect the 10...