Standard & Poor's on Friday maintained its negative outlook on India's 'BBB-' rating, indicating at least a one-in-three chance of a downgrade within the next twelve months.

The agency warned that it will downgrade India's rating from the investment grade if government reforms fail to lead economic growth to recover to levels experienced earlier this decade.

Similarly, if general government fiscal or current account deficits worsen contrary to expectations, S&P said it may lower the ratings.

Although high growth and sizeable foreign currency reserves support the 'BBB-' rating, the last investment grade, huge fiscal deficits and debt, as well as its lower middle-income economy, constrain the ratings, S&P said.

S&P expects India's real GDP per capita growth to rebound to 4.6 percent in the current fiscal ending March 2014, higher than most of its peers', but considerably lower than about 6 percent on average over the five years ending fiscal year ended March 2012.

The current account deficit is expected to improve, because of lower oil and gold prices. But it will remain at around 4 percent in the current fiscal, S&P estimates.

RTTNews