S&P said the government's efforts to rein-in spending indicated the high priority of fiscal prudence, but warned that spending on subsidies and heavy government debt remained concerns.
"Structural fiscal weaknesses continue to be vulnerabilities of Indian sovereign creditworthiness," S&P credit analyst Kim Eng Tan said, reaffirming India's BBB- sovereign credit rating with a "stable" outlook.
"Although India's budgetary performances have strengthened in recent years, its hard-won fiscal improvements could yet unwind because of a financial or commodity shock," Tan added.
Last week, Moody's raised India's outlook to "positive", which brought it a step closer to an upgrade of the credit rating.
Photograph: Babu/Reuters