Bhardwaj spoke in a phone interview from Mumbai.
“The government has definitely been over-ambitious in saying it would achieve a fiscal deficit target of 5.1 percent.
‘‘The lack of a clear road map to achieve the target has raised concerns about the feasibility of achieving the target and that has possibly triggered the rating action. However, the view can be reversed if the government gives a plan of action on how the deficit target will be achieved.
‘‘The pace of reforms needs to accelerate. At some point, the government will have to deregulate diesel prices or increase the frequency of price increase in order to stay with the deficit gap.
‘‘The reversal of this rating will depend on cumulative action of how the economy fares, the trajectory of current account deficit, how inflation is evolving and to what extent the government is moving on fiscal discipline.’’
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