Global ratings agency Standard & Poor's (S&P) has reiterated that high fiscal deficit and heavy debt burden remained the biggest rating constraints for India, and the country still faced one-in-three chance of downgrade in its sovereign rating to junk grade over the next two years.

S&P said that India's fiscal profile was a significant rating weakness. The agency's views in the new report are similar to the warning that it had issued in October this year.

In its latest report, the S&P warned, "A downgrade is likely if India's economic growth prospects dim, its external position deteriorates, its political climate worsens, or fiscal reforms slow."

Currently, S&P has a triple-B minus rating on India with a negative outlook, which is just a notch above the junk grade. Any further downgrade will hurt capital flows and investor sentiment, and also make it more difficult for Indian companies to raise funds from foreign investors.

The agency said that the next elections, which will be held by May of 2014, and the current political standstill will allow the government to make only modest progress in fiscal and public sector reforms.

S&P's report is in acute contrast with rival ratings agency Moody's, which recently said that India's growth prospects for the year of 2013 have improved.