MUMBAI - India's central bank will conduct open market sales of bonds once government spending picks up and there is improvement in durable liquidity surplus, two sources aware of the development told Reuters on Friday.

"Currently, government spending is low and core liquidity is in a surplus of 3 trillion rupees-3.5 trillion rupees," one of the sources, who is familiar with the central bank's thinking, said.

Core liquidity surplus includes the government's cash balances held with the central bank.

(Reporting by Swati Bhat and Siddhi Nayak; Editing by Mrigank Dhaniwala)