Global rating agency Moody's Monday said that risks to the Indian economy have grown but not to the extent that the currency ratings are threatened.

"Higher oil prices and the lack of adequate fiscal policy reactions amidst high pent-up price pressures are putting the burden of macro-economic adjustment on the monetary authorities," said Moody's Sovereign Risk Unit Senior Analyst Aninda Mitra.

Although the risks confronting India's economy have grown, the government's Baa3 (investment grade) foreign currency and Ba2 (non-investment grade) local currency ratings are threatened, it said.

Last month, another international rating agency Fitch downgraded India's credit outlook from stable to negative.

Concurrently, he said, greater government borrowing needs, while not leading to a material deterioration of its key credit metrics, would likely prevent an improvement in the remainder of FY 08-09, contrary to the earlier expectation.

Furthermore, political issues play a role in the country's fiscal problems, he said, adding the government's fiscal difficulties relate partly to its inability to raise retail fuel prices and reduce the growing, off-budget fiscal cost of reimbursing oil marketing companies as part of its subsidies program.

"While Moody's overall assessment is that the current constellation of risks is captured in the prevailing stable outlook, downside pressures could emerge," he said.