Here are reasons behind India's vulnerability to economic shocks

April-November fiscal deficit already hit 80% of budget.

According to BBVA, with the current account deficit at record levels (5.4% of GDP in 3Q12) and the April-November fiscal deficit already at 80% of budget estimates, the Indian economy remains more vulnerable to shocks than most emerging markets. 

India’s high CAD is a consequence of its high fiscal deficit, which together have adversely affected macro stability. Despite policy efforts, the quality of fiscal adjustment remains a concern and cumulative trends in revenue remain bleak.

"We expect FY13 deficit to overshoot the official target of 5.3% of GDP (BBVA: 5.7%), unless the government resorts to creative accounting by deferring subsidy over-runs to next year," BBVA said.