Moody's anticipates a wider fiscal deficit of about 11.8 per cent of GDP in 2021/22.
India's severe second wave of coronavirus infections will slow near-term economic recovery and could weigh on longer-term growth dynamics, rating agency Moody's Investors Service said in a note on Tuesday.
"Deeper stresses in the economy and financial system could lead to a more severe and prolonged erosion in fiscal strength, exerting further credit pressure," said Gene Fang, Moody's Associate Managing Director.
India's COVID-19 crisis showed little sign of easing on Tuesday, with a seven-day average of new cases at a record high and international health authorities warning the country's variant of the virus poses a global concern.