Reports about Prime Minister Narendra Modi's office calling for a review emerged after senior bureaucrat Subhash Chandra Garg was shifted from the finance ministry to the power ministry on Wednesday.

News agency IANS quoted sources as saying Mr Garg's shift was linked to the fact that the PM's office was "unhappy" about the bond proposal.

The Prime Minister's Office was not properly briefed about the consequences of overseas dollar-denominated bonds by Mr Garg, who had originally pushed this idea, the agency quoted sources as saying.

The Finance Minister announced the offshore bond sale plan in the budget, amid shrinking options to raise funds to boost spending on infrastructure.

The idea has been criticised by former heads of the Reserve Bank of India, economists and allies of the ruling BJP alike; they argue it could create long-term economic risks by exposing the government's liabilities to currency fluctuations.

As an alternative, the government could raise funds through rupee-denominated bonds in the overseas market instead, Reuters quoted a source who is an adviser to the government.

Mr Garg - who was the senior-most bureaucrat in the Finance Ministry - applied for voluntary retirement on Thursday, becoming the first Finance Secretary to do so in 19 years. If his request is accepted, he will leave government service more than a year before his scheduled retirement.

As Secretary in the Department of Economic affairs, he was in charge of fiscal policy, Reserve Bank of India-related matters, and was closely involved in the Budget.

He was a central figure in the tension between the government and the RBI last year, which ended with the sudden exit of Urjit Patel as RBI governor in December.