The Indian government is concerned about rising yields on Treasury-bills and will take appropriate remedial measures, a government source told Reuters on Friday.

The spike is "unreasoned", and the government may look at cutting its 2022-23 borrowing through this debt instrument, said the source, who refused to be named as they are not authorised to speak to media.

Yields on 91-day, 182-day and 364-day T-bills have hit their highest levels since October 2018 on fears that the liquidity in the banking system will slip into deficit and uncertainties over interest rate hikes.

The official added that "the predictability and transparency in market borrowing that the government has shown is being misused."

An email sent to the finance ministry spokesperson did not elicit an immediate response.

The cutoff of the 364-day note rose above the benchmark 7.26% 2032 bond yield this week. Higher yields raise the cost of borrowing for the government.

Rising supply has also added to the spike in yields. India had increased its borrowing via T-bills by 500 billion Indian rupees ($6.09 billion) for March, adding 100 billion rupees to each weekly auction.

The government is scheduled to raise 390 billion rupees via T-bills next week, and a similar amount in the last two weeks of this financial year.

The source also said the government has cleared 1.4 trillion rupees as tax devolution to states on Friday that will help them in meeting their funding needs.

($1 = 82.0640 Indian rupees)

(Reporting by Nikunj Ohri and Dharamraj Dhutia; Editing by Saumyadeb Chakrabarty)