Moody’s downgraded India’s ratings to Baa3 from Baa2 on Monday, saying that the country’s policymaking institutions will be challenged to mitigate the risks of a prolonged period of slower growth, rising debt and stress in the financial sector.

“Measures to improve India’s fiscal strength, which were at the heart of the government’s policy framework a few years ago, have underwhelmed,” the ratings agency said in a statement.

The ratings cut was not driven by the impact of the COVID-19 pandemic but amplifies vulnerabilities in India’s credit profile that were present and building prior to the shock, the agency added.

Moody’s also maintained its outlook on the South Asian country at “negative”.