The Indian economy probably grew an annual 6.9 percent in the quarter through September, its weakest pace in more than two years, according to a Reuters poll.

"GDP is expected to be around 6.8 to 7 percent, but it is not factored in yet," said Sandeep Bagla, a senior vice president with ICICI Securities Primary Dealership.

If growth is much lower than expected, then the market expects the central bank to advance its easing cycle, which is currently assumed to start in April, he said.

By 10:45 a.m. (0515 GMT), the yield on the new benchmark 10-year bond was steady at 8.83 percent after moving in a narrow 2 basis point band so far. It is seen holding a 8.80-8.85 percent band during the session.

Total volumes on the central bank's electronic trading platform were at a low 20 billion rupees ($385 million) compared to the normal 30 billion to 40 billion rupees dealt in the first two hours of trade.

"The ranged market is more like the lull before the storm, but no one knows really knows when the storm will come," ICICI PD's Bagla said.

"If the central bank announces open market operations, then the market will rally, if not then it will fall, it's a single factor model," he added.

Traders are hoping the central bank will announce more buybacks to ease pressure on tight liquidity and help the market deal with lined-up debt supplies. The Reserve Bank of India (RBI) had bought back 94.35 billion rupees of bonds last Thursday.

The government is set to sell 130 billion rupees ($2.5 billion) of bonds on Friday, the RBI said on Monday. The papers on sale include: 40 billion rupees of 7.83 percent 2018 bonds, 60 billion rupees of 8.79 percent 2021 bonds and 30 billion rupees of the new 19-year 2030 bond.

Finance Minister Pranab Mukherjee on Friday sought parliamentary nod for a net additional spending of 568.5 billion rupees for the fiscal year ending March, increasing fears the government will not be able to meet its fiscal deficit aim of 4.6 percent of GDP.

"The auction papers were largely in line with expectations so not many triggers in either direction for today," a senior dealer with a primary dealership said.

"I think the near-term direction will depend a lot on the growth data tomorrow. The debt limit auction will not have any immediate impact but flows should be positive as and when they start coming in," he added.

The Securities and Exchange Board of India will allocate the enhanced foreign institutional investor limits in government and corporate debt via auction on Wednesday.

The one-year overnight indexed swap rate was at 8.10 percent, down 1 basis point from its previous close, while the benchmark five-year swap rate was at 7.32 percent from 7.33 percent on Monday.