Credit-rating agencies Moody's Investor Services and Standard & Poor's expressed some concern that Finance Minister P Chidambaram's Union Budget 2005-06 may have missed the boat on fiscal consolidation.

Although they generally welcomed India's solid external liquidity and moderate external debt burden, it was felt the finance minister let go of the opportunity for faster fiscal consolidation during a time of higher growth.

"Basically we are concerned that the fiscal deficit number that they (the Indian government) are projecting for next year are very modest in dealing with the problem," said Joydeep Mukherjee, S&P's analyst for South Asia.

"Although the economy is growing very well and tax revenues are growing as well, there is no reduction next year in the Budget deficit and that is a bit disappointing," Mukherjee told rediff.com.

"There is nothing negative about the Budget; it is simply that given the good news and the economy, it is a bit disappointing that there was no fiscal effort in the Budget proposals," he said.

Moody's said that they were struck by the fact that the finance minister was unable to meet the FRBM (Fiscal Management and Budget Responsibility) Act. "I think the problem is that no one believes they will meet their targets. So, I think it would have been a statement of their seriousness of intent had they been able to that," Kristin Lindow, lead sovereign analyst for India and a vice president of Moody's, told rediff.com.

Fitch Ratings, another international rating agency, expressed almost similar sentiments. "Surpassing the targets set by the FRBM would have boosted investors' confidence significantly as it would have reflected the government's ability to pursue a more aggressive front-loaded fiscal consolidation process," Shelly Shetty, Fitch's analyst on India.

Shetty said in stead of doing that the government used the 'excuse of greater transfer of resources to states' to put on hold the deficit-reducing provisions of the FRBM. "This does little to improve the credibility of this act," she said.

All the three agencies, however, said that despite their concerns or reservations, the budgetary proposals of Chidambaram are not going to have any adverse impact on the credit rating as far as India is concerned.

"We just raised the rating a couple of weeks ago and we have a stable outlook. Nothing has changed in the Budget that would change the rating," Mukherjee said. Both Moody's and Fitch agreed.

"Fitch currently assigns foreign and local currency ratings 'BB+' to India and the outlook is stable," Shetty said.

However, Lindow said that Moody's does have a negative rating on the domestic currency rating of India, whish, she said, is already two notches below the foreign currency rating.