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Prime Minister Narendra Modi is under pressure to perform on the economy after a Budget packed with ambitious targets met mild scepticism from investors and credit-rating agencies and failed to dispel the latent risk of a downgrade.
With varying degrees of severity, Fitch, Moody's and Standard & Poor's all expressed worries that Finance Minister Arun Jaitley's pledge to keep this year's fiscal deficit to 4.1 percent of gross domestic product looked unrealistic.
While the Budget unveiled a number of measures to attract foreign investment, Jaitley's revenue and growth numbers were predicated on a major revival in private investment across the economy - one that is by no means guaranteed.
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S&P, the only one of the three main agencies that has India on a negative outlook, said the sovereign debt of Asia's third largest economy could be rated "junk" within a year if the government fails to revive low economic growth.
Atsi Sheth, Moody's sovereign rating analyst, told Reuters: "The finance minister did say that we want to reduce fuel and food subsidies, but how exactly that will happen was not clear in this budget statement."
