On Dec. 6, 2005, Standard & Poor's Ratings Services affirmed its 'BB+' long-term and 'B' short-term sovereign ratings on the Republic of India. The outlook on the long-term rating remains stable. The principal risks on India are generated by a weak fiscal profile, especially its high deficit and serious fiscal inflexibility. India's fiscal weakness is one of the worst among rated sovereigns, leaving it particularly vulnerable to any secular decline in growth rates or increase in interest rates. The combined central and state government deficits will amount to 8%-9% of GDP in the near term, while interest payments are likely to consume one-third of general government revenue. The consolidated debt of the central and state governments is still expected to
