Flagging subdued rural economy as a 'credit negative' for India's sovereign rating, global giant Moody's said there are growing concerns about risk of policy stagnation and "some disappointment" has emerged over the pace of reforms under the Prime Minister Narendra Modi's government.

In its latest 'Inside India' report, Moody's Investors Service said the consensus view on India's economic growth prospects is relatively optimistic and in line with Moody's baseline forecast of 7.5 per cent expansion in current fiscal.

"Forecast represents the highest projection amongst G20 economies, and provides a key pillar of support for the Baa3 sovereign rating and positive outlook," it said.

Moody's in April this year had revised India's sovereign rating outlook to "positive" from "stable". It has a "Baa3" rating on India, the lowest investment grade. Major credit rating agencies like S&P and Fitch all have the lowest investment grade rating on India.