The Indian government must revive its asset monetization program to create revenue streams beyond taxes that can help finance spending while keeping it fiscally sound, leading economists say.

“Over time, it will be nice to see a renewed emphasis on asset sales, monetization of infrastructure assets and disinvestment as another source of income,” Sajid Z. Chinoy, chief economist at JPMorgan Chase & Co., told Bloomberg TV's Menaka Doshi on Wednesday. "India will have huge spending commitments over the next 10 years."

Prime Minister Narendra Modi, who returned to power last month with a weaker mandate, is under pressure to spend more to shore up voter support and meet the demands of his coalition partners.

The federal budget released on Tuesday aimed for a smaller fiscal deficit this year amid record dividends from the Reserve Bank of India and rising tax revenues.

Next year, the government aims to further reduce the fiscal gap, which is necessary for India to improve its credit rating. India's debt is currently priced at the lowest level of investment grade.

Chinoy said raising revenue by selling government assets would be more profitable than raising taxes, which could dampen demand.

“The beauty of asset sales is that it is efficient, like an asset swap, you sell one asset to build a road or invest in human capital,” he said.

The government's efforts to sell large tickets to state-owned companies have met with little success, forcing it to scale back its program to small stock offerings through stock exchanges. In the last budget, the government had set a target of raising Rs 500 billion through share sales by March.