* 10-yr yield down a notch but FY11 supply a concern
* Taking steps to ease food inflation in few mths-Fin Min (Updates to mid-morning)
MUMBAI, March 4 (Reuters) - Indian federal bond yields treaded water on Thursday as traders awaited food and fuel price data around noon (0630 GMT), while underlying sentiment was bearish on next fiscal year's borrowing concerns.
At 10:08 a.m. (0438 GMT), the yield on the benchmark 10-year government bond IN10YT=RR was down one basis point at 7.93 percent.
Volumes were low at 20.65 billion rupees ($45 million) on the central bank's trading platform.
"The market would remain rangebound with statements from policymakers eyed for further cues along with economic data," said a senior trader with a foreign bank.
"The 10-year yield would be in the range of 7.92-7.96 percent range during trade," he said.
The food and fuel price data are for the week ended Feb. 20. Prices had eased slightly in the previous week after rising for four weeks in a row.
India's economic recovery is still being driven by public spending and is not yet broad-based, the finance minister said on Wednesday, further clouding the debate on the timing of rate hikes by the central bank.
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