'The need for fiscal stimulus to revive an economy battered by external weakness may have prompted a reallocation of funding from non-urgent infrastructure development to areas crucial in sustaining social stability,' it said.

As per Moody's, drought now has further complicated policymaking and put social spending on the top of the priority list over the need to enhance the appeal of capital city even when the games present an opportunity to attract investors and tourists.

'But the timing of the event certainly helps India in maximizing the gains from playing host.'

The remarks by Moody's come a week after Commonwealth Games Federation chief Michael Fennell aired his scepticism over India's ability to host the games, even seeking an appointment with Prime Minister Manmohan Singh to apprise him of the situation.