Will India get serious now on fiscal deficit?

Ever-gaping deficits have led S&P to downgrade its country outlook, among other punitive actions.

While concerns for the budget deficit led to the lowered outlook -- and a possible sovereign rating dowgrade -- it is not the only cause for concern for the Indian government, according to BBVA. It is also faced with slowing growth and pressure to implement "crucial" investment reforms.

Here's more from BBVA:

Citing slowing growth prospects, widening twin deficits and rising external pressures, S&P revised its outlook on India today, from stable to negative. India's sovereign rating was re-affirmed at investment grade status (BBB-), however S&P also placed the odds of an eventual rating downgrade at 1-in-3. S&P expects that the Indian government will face headwinds in implementing policy measures owing to an unfavorable political environment. While S&P's actions were not completely unanticipated, the news resulted in selling pressure on the Indian rupee, which edged lower to 52.55/USD. Looking ahead, the focus will be on whether or not India’s government takes actions to rein in the fiscal deficit while also implementing crucial investment reforms.